The Teachers’ Pension Scheme (Scotland) Regulations 2014

CHAPTER 3 Phased retirement

Interpretation of Chapter

86.—(1) In this Chapter—

“average annual rate”, in relation to pensionable earnings in a 6 month period, means the amount of pensionable earnings in that period multiplied by 2;

“increased annual rate”, in relation to pensionable earnings, has the meaning given in regulation 94;

“new employment” has the meaning given in regulation 88(2);

“new employment condition” has the meaning given in regulation 88;

“pensionable earnings”, for a person not in an eligible employment, means the amount which would be the person’s pensionable earnings if the employment were eligible employment;

“phased retirement application” means an application under regulation 159 for payment of a phased retirement pension;

“previous employment” has the meaning given in regulation 88(2);

“reduced annual rate”, in relation to pensionable earnings, has the meaning given in regulation 87(2);

“reduced annual rate condition” has the meaning given in regulation 87.

(2) When calculating the reduced annual rate or increased annual rate of a person’s pensionable earnings, any standard increase(1) which takes effect on or after the entitlement day must be ignored.

The reduced annual rate condition

87.  A person (P) meets the reduced annual rate condition if—

(a) P is in one or more eligible employments;

(b) the terms of employment change and as a result there is a reduction in the annual amount of P’s pensionable earnings; and

(c) the reduced annual rate is not more than 80% of the average annual rate of P’s pensionable earnings for the 6 months of pensionable service immediately before the reduction.

The new employment condition

88.—(1) A person (P) meets the new employment condition if—

(a) P leaves all eligible employment;

(b) within 6 months after leaving all eligible employment, P enters a new employment; and

(c) on the day after the entitlement day referred to in regulation 89 the reduced annual rate of P’s pensionable earnings in the new employment does not exceed 80% of the average annual rate of P’s pensionable earnings for the last 6 months of the previous employment.

(2) In this regulation—

“a new employment” means—

(a)

one or more new eligible employments;

(b)

one or more employments with an employer mentioned in any paragraph in Part 2 of Schedule 1 that is not an eligible employment where P’s normal duties in the employment include providing education or services ancillary to education (other than administrative services); or

(c)

one or more new eligible employments and one or more employments mentioned in paragraph (b); and

“previous employment” means one or more previous eligible employments.

Meaning of “entitlement day” (phased retirement pension)

89.  The entitlement day for a phased retirement pension is—

(a) if a person (P) meets the reduced annual rate condition, the day on which the reduced annual rate takes effect; or

(b) if P meets the new employment condition, the day on which P enters a new employment.

Entitlement to phased retirement pension

90.—(1) A person (P) is entitled to payment of a phased retirement earned pension from the entitlement day if—

(a) P has reached 55 but has not reached 75;

(b) P is qualified or re-qualified for retirement benefits;

(c) P meets the reduced annual rate condition or the new employment condition;

(d) P has made a phased retirement application; and

(e) P has not applied under regulation 159 for payment of any other retirement pension.

(2) P is entitled to payment of a phased retirement additional pension from the entitlement day if P has applied under regulation 91 to receive an additional pension with the phased retirement earned pension.

(3) Subject to regulation 94, a phased retirement pension is payable for life.

Phased retirement applications

91.—(1) For the purpose of regulation 90, a person (P) must make a phased retirement application within 3 months after the entitlement day.

(2) The application must—

(a) be accompanied by a certificate from P’s current employer stating that P meets the reduced annual rate condition or the new employment condition; and

(b) state whether P is applying to receive an additional pension with the phased retirement earned pension.

(3) A certificate is not required in relation to the new employment condition if the scheme manager is satisfied that P’s current employer has not received the necessary information about P’s previous employment from P’s previous employer.

Phased retirement proportion

92.—(1) A phased retirement application must specify the proportion of accrued earned pension for which payment is claimed (“phased retirement proportion”).

(2) The phased retirement proportion must not exceed 75%.

Annual rate of phased retirement pension

93.  The annual rate of phased retirement pension payable to a member (P) is found by—

(a) taking the amount of phased retirement earned pension specified in P’s pensioner member’s account;

(b) applying the standard reduction (if any) and the actuarial adjustment (if any) specified in that account in relation to that amount;

(c) if P has applied to receive an additional pension with the phased retirement earned pension, adding the amount of phased retirement additional pension specified in that account;

(d) applying the actuarial adjustment (if any) specified in that account in relation to that amount; and

(e) subtracting the commutation amount (if any) specified in that account in relation to the sum of those amounts.

Cessation of phased retirement pension

94.—(1) A phased retirement pension ceases to be payable to a member (P) if—

(a) in the 12 months after the entitlement day, the annual rate of P’s pensionable earnings increases; and

(b) as a result, the increased annual rate is more than 80% of the average annual rate of P’s pensionable earnings in—

(i) if P met the reduced annual rate condition, the 6 months of pensionable service immediately before the reduced annual rate took effect; or

(ii) if P met the new employment condition, the last 6 months of the previous employment.

(2) In this regulation, “increased annual rate” means the annual rate of P’s pensionable earnings in the 12 months after the entitlement day.

Subsequent phased retirement applications

95.—(1) P may make a subsequent phased retirement application if—

(a) a phased retirement pension ceases to be payable under regulation 94 but P once more meets the reduced annual rate condition or the new employment condition; or

(b) while P is receiving a phased retirement pension, the terms of P’s employment change or P enters a new employment and P once more meets the reduced annual rate condition or the new employment condition.

(2) P may not make a subsequent phased retirement application if—

(a) P has made 3 previous phased retirement applications; or

(b) P has not reached 60 and has made 2 previous phased retirement applications.

(3) If P makes a subsequent phased retirement application after a phased retirement pension ceases to be payable—

(a) the phased retirement proportion specified in that application must be the same as or greater than the phased retirement proportion specified in the original application;

(b) if P applied under regulation 91 to receive an additional pension as part of the original pension, P must apply under that regulation to receive an additional pension as part of the new phased retirement pension (“the new pension”); and

(c) if P received a lump sum under regulation 162 in place of part of the original pension (“original lump sum”)—

(i) P must apply under that regulation to receive a lump sum in place of part of the new pension (“new lump sum”);

(ii) the amount of the new lump sum must be the same as or greater than the amount of the original lump sum; and

(iii) the amount of lump sum payable is the amount of the new lump sum less the amount of the original lump sum.

(4) Any subsequent phased retirement application must be made in accordance with regulation 91.

(5) In this regulation—

“original application” means P’s application under regulation 159 for payment of the original pension;

“original pension” means a phased retirement pension that ceases to be payable under regulation 94;

“previous phased retirement application” includes the original application.

(1)

See the meaning of “standard increase” in Chapter 4 of Part 3.