The Teachers’ Pension Scheme (Amendment) Regulations 2014

Insertion of new Schedule 4 (Scheme valuation and employer cost cap)

52.  After Schedule 3, insert—

Regulation 225

“SCHEDULE 4 Scheme valuation and employer cost cap

Scheme valuation report

1.   The scheme manager must commission the scheme actuary to carry out a valuation of this scheme (“scheme valuation”) and any connected scheme, and to prepare a scheme valuation report, in accordance with, and by reference to the effective dates defined and set out in HM Treasury directions under section 11 of the Public Service Pensions Act 2013, referred to in this Schedule as “Treasury directions”.

Employer cost cap

2.   The employer cost cap for this scheme is 10.9% of the pensionable earnings of members of this scheme.

Breach of employer cost cap margins

3.   If the scheme actuary reports in a valuation report that the cost cap cost of the scheme, calculated following a valuation in accordance with Treasury directions, has gone beyond the margins specified in HM Treasury directions under section 12 of the Public Service Pensions Act 2013, paragraph 4 applies.

Teachers’ Pension Scheme Advisory Board report

4.   Where this paragraph applies, the responsible authority must request the Teachers’ Pension Scheme Advisory Board constituted under Part 2 of these Regulations to report, within six months of the request—

(a) whether there is agreement between the employer representatives and the member representatives on a recommended procedure for aligning the cost cap cost of the scheme with the employer cost cap; and

(b) if there is such agreement, the procedure which the board is in agreement to recommend.

Action by the responsible authority

5.   On receipt of the Teachers’ Pension Scheme Advisory Board’s report, the responsible authority, in consultation with the scheme actuary and with such persons as the responsible authority considers appropriate, must—

(a) review any recommendations put forward in that report; and

(b) either—

(i) if agreement has been reached, and the responsible authority accepts the proposed procedure, implement the procedure agreed between the members of the Teachers’ Pension Scheme Advisory Board; or

(ii) if the responsible authority does not agree with any agreement reached, or if agreement has not been reached, make such change to the standard accrual rate as in the opinion of the scheme actuary is necessary to bring the cost cap cost of the scheme into line with the employer cost cap.

Timescale for action

6.   Any changes to the scheme made as a result of paragraph 5 are to take effect within four years of the effective date as at which the cost cap cost of the scheme was evaluated in the scheme actuary’s valuation report.”