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PART 5Discretionary Compensation for Premature Retirement

Application of this Part

14.—(1) This Part applies to eligible teachers.

(2) An eligible teacher is a person (P)—

(a)to whom Part 4 applies, or would apply but for the fact that the member is a protected member;

(b)who immediately before the material date was employed in relevant employment whether or not in a single post and, if in more than one post, had left all such posts on the material date; and

(c)in relation to whom the conditions in paragraph (3) are satisfied.

(3) The conditions are that—

(a)retirement benefits have not become payable to P by virtue of Case C applying to P’s reckonable service, and P has not applied for an ill-health pension or a total incapacity pension under regulation 162 of the 2014 Regulations;

(b)there is no entitlement for P’s case to be considered or further considered for the payment of long-term or retirement compensation under the Colleges of Education (Compensation) Regulations 1975(1) (whether or not by way of review under regulation 32 of those Regulations) in respect of the termination of employment;

(c)P has not received, and is not entitled to receive, a payment under section 37(1) to (3) of the 2002 Act.

Interpretation of this Part

15.—(1) In this part, “notional annual compensation rate” means the rate at which annual compensation would have been payable under regulation 19(1) immediately before the recipient’s death if there had been left out of account any reduction under regulation 27(4)(b), 28, 30 or 31.

(2) For the purposes of paragraph (1), if the deceased died in new employment which was pensionable employment the deceased is to be taken to have ceased to be in that employment immediately before death.

Adjustments

16.  Adjustments to compensation payable under this Part may be made under Part 6.

Discretion to credit an additional period of service

17.—(1) The deciding authority may credit an eligible teacher, including an eligible teacher who has since died, (“a credited teacher”) with a period of service (“the credited period”).

(2) Schedule 1 makes provision for a deduction to be made from the credited period in the circumstances set out in paragraph 1 of that Schedule.

(3) The credited period is not to exceed the shortest of—

(a)the period beginning on the day following the material date and ending on the date the member attains normal pension age less, if paragraph 1 of Schedule 1 applies, any period required by paragraph 2 to be deducted;

(b)the length of effective service;

(c)10 years.

(4) Any credit by the deciding authority must be within 6 months after the material date.

(5) Effective service is the sum of—

(a)any period or periods which the member is entitled to count as reckonable service under the 2010 Regulations or pensionable service under the 2014 Regulations; and

(b)if the member’s employment was not pensionable service, any period which the member would have been entitled so to count if it had been.

Entitlement of credited teacher to compensation

18.—(1) A credited teacher is eligible for annual compensation.

(2) A credited teacher who is eligible for lump sum compensation under regulation 9(2) is eligible for lump sum compensation under this Part.

Calculation of annual compensation

19.—(1) Subject to regulations 27 and 28, the rate of annual compensation payable to a member of the existing scheme is calculated in accordance with the formula—

where A is the member’s period of credited service, B is the member’s average salary and C is the accrual rate used to determine the annual rate of the member’s premature retirement pension.

(2) Subject to regulations 27 and 28, the rate of annual compensation payable to a member of the 2015 scheme, including a transition member, is calculated in accordance with the formula—

where D is the member’s salary on the material date or, if the member was not a full time employee on the material date, the salary that would have been payable had the member been a full time employee on the material date and E is the period of credited service under regulation 17.

Calculation of lump sum compensation

20.  Subject to regulations 27 and 28, the amount of lump sum compensation under regulation 18(2) is the difference between—

(a)the lump sum which would be payable under regulation 62 of the 2010 Regulations if the member’s credited service under regulation 17 were added to the member’s reckonable service under the 2010 Regulations; and

(b)the lump sum which would be payable under regulation 62 of the 2010 Regulations if no such addition were made.

Short-term compensation on death

21.—(1) This regulation applies if a credited teacher (C) dies and a pension—

(a)becomes payable at the short-term rate under regulation 95 or 98 of the 2010 Regulations or regulation 143 or 150 of the 2014 Regulations; or

(b)would have become so payable but for an election under regulation 9 of the 2010 Regulations or regulation 28 or 31 of the 2014 Regulations.

(2) Subject to regulation 25, compensation (“short-term compensation”) is to be paid to or, as the case may be, for the benefit of every person who is or would have been entitled to payment of the short-term pension.

(3) Subject to paragraph (4) and to regulation 29, the rate of the short-term compensation is the rate at which C’s annual compensation payable under regulation 19 would have been payable immediately before C’s death if any reduction under regulation 28 or 30 had not been made.

(4) If C died in new employment which was pensionable employment, C is for the purposes of paragraph (3) to be taken to have ceased to be in that employment immediately before C’s death.

(5) If the rate calculated in accordance with paragraph (3) is less than that of long-term compensation to which there is prospective entitlement under regulation 22, the rate of the short-term compensation is the same as that of the long-term compensation.

Long-term compensation on death

22.  Subject to regulation 25, compensation (“long-term compensation”) is to be paid to or, as the case may be, for the benefit of every person who became or would have become entitled to payment of a long-term pension if a credited teacher dies and a pension—

(a)becomes payable at the long-term rate under regulation 96 or 99 of the 2010 Regulations or regulation 144 or 151 of the 2014 Regulations; or

(b)would have become so payable but for an election under regulation 9 of the 2010 Regulations or regulation 28 or 31 of the 2014 Regulations.

Adult Compensation

23.  Subject to regulation 29, the rate of the long-term compensation payable to a person (P) who is not a child (“adult compensation”) is—

(a)if P is a member of the existing scheme with a normal pension age of 60, one half of the notional annual compensation rate;

(b)if P is a member of the existing scheme with a normal pension age of 65, 1/160 of MxN, where

M is P’s average salary;

N is P’s family benefit service;

(c)if P is a transition member or a member of the 2015 scheme, 37.5% of P’s annual pension.

Child compensation

24.—(1) Subject to regulation 29, the rate of long-term compensation payable to or for the benefit of a child or children while adult compensation is payable is—

(a)one quarter of the notional annual compensation rate if compensation is payable to one child;

(b)one half of the notional annual compensation rate if compensation is payable to two or more children.

(2) Subject to regulation 29, the rate of long-term compensation payable to or for the benefit of a child or children if adult compensation did not become payable, or ceased to be payable, is—

(a)one third of the notional annual compensation rate if compensation is payable to one child;

(b)two thirds of the notional annual compensation rate if compensation is payable to two or more children.

Duration of compensation on death

25.—(1) Subject to paragraph (3), a person’s short-term compensation is payable from the day after that of the death, and the duration of the short-term compensation payable is to be ascertained from the table below.

Table

CategoryPerson entitled to short-term compensationDuration of compensation (months)
1Spouse, civil partner, surviving nominated partner or nominated beneficiary3
2One child or more and adult compensation is payable3
3One child or more and no adult compensation is payable6

In the table above “adult compensation” means short-term compensation payable to a spouse, civil partner, surviving nominated partner or nominated beneficiary.

(2) Subject to paragraph (3), a person’s long-term compensation is payable for life—

(a)from the day following that on which the person’s short-term compensation ceases to be payable; or

(b)if no short-term compensation was payable, from the day after that of the death.

(3) Short-term or long-term compensation payable to or for the benefit of a child ceases to be payable when the child ceases to be an eligible child.

(1)

S.I 1975/1092; amended by S.I. 1981/1088.