SCHEDULE 2

Scheme flexibilities
PART 4

Election to buy out the standard reduction
CHAPTER 1

Making a buy-out election

Eligible to make buy-out election
29
1
A member (P) who has a normal pension age over 65 may elect to pay contributions to buy out the standard reduction (“buy-out election”) for a period of up to 3 years.
2
A buy-out election has effect from the day on which the Department accepts the election.
3
A buy-out election ceases to have effect when the earliest of the following occurs—
a
P reaches normal pension age;
b
a retirement pension other than a phased retirement pension becomes payable to P;
c
P revokes the election or is taken to revoke the election.
4
A buy-out election may only be made within 6 months after P enters pensionable service under this scheme.
5
When making a buy-out election, P must be—
a
in pensionable service; and
b
under normal pension age.
6
P may by written notice to the Department vary a buy-out election if P's normal pension age changes before a retirement pension becomes payable to P.

Making a buy-out election
30
1
A buy-out election made by a member (P) must state the number of years in respect of which the standard reduction is to be bought out.
2
A buy-out election must be made by written notice to the Department.
3
The notice of election must specify—
a
if P is in more than one eligible employment, the names of the employers in relation to P’s eligible employments.
b
P's name;
c
P's date of birth;
d
P's normal pension age;
e
the date on which P entered pensionable service;
f
P's annual rate of pensionable earnings for that employment.
4
The Department may ask P to provide further information.

Accepting a buy-out election
31
1
The Department may accept a buy-out election by giving written notice to the person who made the election (P).
2
The notice must state the buy-out value.
3
A buy-out election is accepted when P receives notice that the Department has accepted the election.

Determination of the buy-out value
32
1
The buy-out value is an amount determined by the Department.
2
If an additional pension election or a faster accrual election is subsequently made in respect of a person (P), the Department may—
a
re-determine the buy-out value; and
b
send a written notice to P stating the re-determined buy-out value.
CHAPTER 2

Payment of buy-out contributions

Determination of contributions payable
33
1
The Department must determine the amount of the monthly payments to be paid in respect of a buy-out election.
2
The Department—
a
may determine the amount of the monthly payments by reference to the number of years stated in the buy-out election and the length of the contributions payment period; and
b
may exercise the functions under this paragraph so as to re-determine the amount of the monthly payments during the contributions payment period.
3
Unless the Department re-determines the amount, monthly payments following a gap in service not exceeding 5 years are the same as before the gap.

Payment of buy-out contributions
34
1
A member (P) must—
a
make the first monthly payment within 2 months after the end of the month in which a buy-out election is accepted; and
b
continue to make the monthly payments until the end of the contributions payment period.
2
The final monthly payment is due in the month before the buy-out period has effect.
3
If the Department re-determines the amount of the monthly payment during the contributions payment period, P must pay the re-determined amount from the beginning of the next financial year.
4
P is taken to revoke a buy-out election if—
a
a monthly payment is missed; and
b
the payment is not made within 3 months after P receives a written demand from the Department.

Monthly payments during gap in service
35
1
A member (P) who has a gap in service during the contributions payment period may choose to resume monthly payments on re-entering pensionable service.
2
P is taken to revoke a buy-out election if P's gap in service exceeds 5 years.
CHAPTER 3

Revocation and refund

Revoking a buy-out election
36
1
A member (P) may revoke a buy-out election at any time before the end of the contributions payment period.
2
If P revokes a buy-out election or is taken to revoke a buy-out election—
a
P's monthly payments cease to be payable on the date of revocation; and
b
when a retirement pension becomes payable to P, the standard reduction applies to such proportion of the maximum three year period referred to in regulation 73 as is determined by the Department.
3
In determining the proportion, the Department must take into account—
a
the number of monthly payments made; and
b
the number of years stated in the buy-out election.
4
If P revokes the election or is taken to revoke a buy-out election, P may not make a subsequent buy-out election.
5
A revocation must be by written notice to the Department.
6
A revocation has effect from the date it is received by the Department (“date of revocation”).

Member leaves all pensionable service before qualifying for retirement benefits
37
1
This paragraph applies if a member (P) leaves all pensionable service under this scheme before P is qualified for retirement benefits in respect of that service.
2
On an application by P for a repayment of the balance of contributions, any monthly payments made before the last day of pensionable service must be refunded to P.
Sch. 2 para. 30(3)(a) substituted (1.4.2015) by The Teachers’ Pensions (Miscellaneous Amendments) Regulations (Northern Ireland) 2015 (S.R. 2015/126), regs. 1, 15
Sch. 2 para. 29(4) modified (1.10.2023) by The Teachers’ Pension Scheme (Remediable Service) Regulations (Northern Ireland) 2023 (S.R. 2023/131), regs. 1, 31(1)