The Teachers’ Pensions etc. (Reform Amendments) Regulations 2006

Employers’ contributions

60.  For regulation G5 substitute—

“Employers’ contributions

G5.— (1) In this regulation—

(a) “relevant period” is to be construed in accordance with regulation G4(3),

(b) the “net contribution rate” for any relevant period is the aggregate of the percentage specified for that period under regulation G4(3) and any percentage specified for that period under regulation G4(7) less any percentage specified for that period under regulation G4(8).

(2) The employer of a person in pensionable employment, other than a services education officer, is, during every relevant period, to pay contributions of the required percentage of the person’s contributable salary for the time being.

(3) The required percentage for the relevant period starting on 1st January 2007 is 14.1%.

(4) The required percentage for subsequent relevant periods shall be determined in accordance with paragraphs (5) to (9).

(5) For the purposes of this regulation the element appropriate for cost sharing in relation to any relevant period is that part of the difference between the net contribution rate for that period and the net contribution rate for the previous period determined by the Secretary of State in relation to each relevant period and in making such a determination the Secretary of State shall secure that—

(a) changes in assumptions about life expectancy and differences between assumptions made in the previous review under regulation G4 about the values of any items and the actual values of those items are included in the element appropriate for cost sharing, and

(b) any reduction in the net contribution rate arising from the fact that the normal retirement age for —

(i) a 2007 or later entrant, or

(ii) a person with mixed service

is 65, is not included in the element appropriate for cost sharing.

(6) In relation to any relevant period the Secretary of State shall also calculate separately the part of the difference between the net contribution rate for that period and the net contribution rate for the previous period which is not appropriate for cost sharing (“the unshared element”) and the Secretary of State shall then—

(a) determine the part of the unshared element which is appropriate for the employer contribution cap, and

(b) calculate separately the part of the unshared element which is not appropriate for the employer contribution cap.

(7) Any determination made by the Secretary of State pursuant to paragraph (5) or (6) shall be made after consultation with such representatives of local education authorities and of teachers as appear to the Secretary of State to be appropriate and with the consent of the Treasury.

(8) In paragraphs (9) and (10)—

• X is the element appropriate for cost sharing determined pursuant to paragraph (5),

• Y is the part of the unshared element which is appropriate for the employer contribution cap, determined pursuant to paragraph (6)(a), and

• Z is the part of the unshared element which is not appropriate for the employer contribution cap, calculated in accordance with paragraph (6)(b),

and X, Y and Z may be positive or negative depending on whether there is an increase or a decrease.

(9) In the formula in paragraph (10) A is the lesser of B and C+Y+1/2X where—

(a) B is—

(i) for the relevant period immediately after the one starting on 1st January 2007, 14, and

(ii) for each subsequent relevant period, the value which B had for the previous relevant period together with the value of Z which applied in determining the required percentage for the previous relevant period, and

(b) C is—

(i) for the relevant period immediately after the one starting on 1st January 2007, 14.1,

(ii) for the next relevant period, the amount which would have been the required percentage for the previous relevant period if it had been calculated as 14.1+Y+1/2X+Z, and

(iii) for each subsequent relevant period, the amount which would have been the required percentage for the previous relevant period if it had been calculated as D+Y+1/2X+Z, where D is the amount which would have been the required percentage for the relevant period before the previous relevant period calculated in accordance with this sub-paragraph.

(10) The required percentage for each relevant period is A+Z.

(11) Paragraph 9 of Schedule 15 has effect for the purpose of determining the required percentage for relevant periods before the relevant period starting on 1st January 2007.

(12) No contributions are to be paid in respect of any person to whom regulation E32(2) (a) (restriction of reckonable service to 45 years) has become applicable.”.