The National Health Service Superannuation and Pension Schemes (Miscellaneous Amendment) (Scotland) Regulations 2024

New regulations E11A, E11B and E11C

11.  After regulation E11 (early retirement pension (with actuarial reduction)), insert—

“Partial retirement pension

E11A.— (1) A member who is in pensionable employment or who is a non-pensionable member of the scheme may exercise an option under this regulation if—

(a) the member—

(i) has reached normal minimum pension age or, where relevant, protected pension age,

(ii) has at least two years’ qualifying service, and

(iii) continues to be in pensionable employment for the purposes of the 2015 Scheme or, where the member is in more than one pensionable employment for the purposes of the 2015 Scheme, the member continues to be in at least one of those pensionable employments,

(b) the terms on which the member holds the pensionable employment or employments referred to in sub-paragraph (a)(iii) change, and

(c) as a result of the change referred to in sub-paragraph (b), the annual rate of the member’s pensionable pay is reduced (disregarding any reduction in pensionable pay resulting from the member entering into a salary sacrifice arrangement) to 90% or less of the amount of the member’s pensionable pay during the period of 12 months ending with the option day.

(2) If the member was not in pensionable employment for the purposes of the 2015 Scheme during the whole of the period of 12 months referred to in paragraph (1)(c), that paragraph applies as if the member’s pensionable pay during that period were—

where—

• PP is the member’s pensionable pay for the part of that period during which the member was in pensionable employment for the purposes of the 2015 Scheme, and

• N is the number of days in that period on which the member was in pensionable employment for the purposes of the 2015 Scheme.

(3) The option may only be exercised by notice in writing in such form as the Scottish Ministers require and must be accompanied by a statement in writing by the member’s employing authority, or employing authorities, that the conditions in paragraph (1)(b) and (c) are met.

(4) The option must specify—

(a) the percentage of the member’s pension (excluding any additional pension) in respect of which the member claims immediate payment (“the specified percentage”),

(b) whether the pensionable service used to calculate the pension referred to at sub-paragraph (a) is to include additional service (if any) that the member has purchased under regulation Q1 (right to buy additional service), and

(c) whether the member claims immediate payment of additional pension (if any).

(5) A member who duly exercises the option under this regulation is entitled—

(a) in the case of a member who has reached the age of 60, to immediate payment of the specified percentage of the pension to which the member would be entitled under regulation E1 (normal retirement pension) if the member had retired from pensionable employment on the option day (including any additional service specified under paragraph (4)(b) but disregarding any additional pension),

(b) in the case of a member who has not reached the age of 60, to immediate payment of the specified percentage of the pension to which the member would be entitled under regulation E11 (early retirement pension with actuarial reduction) if the member had retired from pensionable employment on the option day (including any additional service specified under paragraph (4)(b) but disregarding any additional pension),

(c) in the case of a special class officer who meets the retirement condition in paragraph (13) of this regulation and has reached the age of 55, to immediate payment of the specified percentage of the pension to which the member would be entitled under regulation E1 (normal retirement pension) if the member had retired from pensionable employment on the option day (including any additional service specified under paragraph (4)(b) but disregarding any additional pension), and

(d) where the option specifies that the member claims immediate payment of additional pension—

(i) if the option day falls on or after the member’s chosen birthday, to the immediate payment of the additional pension, and

(ii) if the option day falls before the member’s chosen birthday, to the immediate payment of the additional pension reduced in accordance with paragraphs (5) and (6) of regulation Q15 (effect of death or early payment of pension after option exercised under regulation Q8, Q10 or Q11).

(6) If—

(a) the option specifies that the pensionable service used to calculate the pension referred to at paragraph (5)(a), (b) or (c) is to include additional service that the member has purchased under regulation Q1,

(b) the member’s method of payment for the additional service is regular additional contributions, and

(c) the option day falls before the member’s chosen date,

then the proportion of additional service to be included in the pensionable service used to calculate that pension will be reduced in accordance with paragraph (6) of regulation Q7 (part payment for additional service or unreduced retirement lump sum).

(7) Subject to paragraph (8), the specified percentage must be such that the pension to which the member becomes entitled as a result of the option (before the exercise of the option under regulation E17 (general option to exchange part of pension for lump sum) and disregarding any additional benefits)—

(a) is not less than the amount of the pension payable by reference to 20% of the member’s pensionable service at the end of the option day (disregarding any additional benefits), and

(b) is not less than 0.05% of the member’s lump sum and death benefit allowance on the option day.

(8) Where a member has reached protected pension age but not yet normal minimum pension age, the specified percentage must be 100% of the member’s pensionable service at the end of the option day (disregarding any additional benefits).

(9) Where a pension is payable under paragraph (5)(b), the lump sum payable under regulation E13 (lump sum on retirement) will be reduced in accordance with paragraph (7)(b) of regulation E14.

(10) The option under this regulation may only be exercised on no more than two occasions and the Scottish Ministers shall take advice from the Scheme Actuary regarding—

(a) any benefits to be paid after the exercise of the first option (but before the exercise of the second option),

(b) any benefits to be paid after the exercise of the second option, and

(c) the final payment.

(11) For the purposes of these Regulations, a member who has exercised the option under this regulation—

(a) is a member to whom a pension has become payable in respect of the pension to which the member is immediately entitled as a result of exercising the option and the specified percentage of the pensionable service that that pension represents,

(b) if the member continues as an active member of the 2015 Scheme after the option day, is treated as a member who is in pensionable employment in respect of so much of the member’s pensionable service in this Section of the scheme that does not fall within sub-paragraph (a) (“the unspecified service”), and

(c) if the member does not continue as an active member of the 2015 Scheme after the option day, is a member with a preserved pension in respect of the unspecified service.

(12) For the purposes of this regulation, in the case of a non-pensionable member of the scheme, “pensionable pay” means the member’s pensionable earnings for the purposes of the 2015 Scheme.

(13) In this regulation—

“additional benefits” means any additional service specified under paragraph (4)(b) and any additional pension specified under paragraph (4)(c),

“chosen birthday” has the meaning given in paragraph (9) of regulation Q8 (option to pay additional periodical contributions to purchase additional pension),

“chosen date” has the meaning given in paragraph (3) of regulation Q5 (paying by regular additional contributions),

“non-pensionable member of the scheme” means a member of—

(a)

the scheme who, on 31 March 2022, is no longer required to pay contributions under regulation D1(26) or (27) (contributions by members: age and pensionable service limits) of these Regulations, and

(b)

the 2015 scheme in respect of service on or after 1 October 2023,

“the option day” means the day before the reduction in pensionable pay by virtue of which the option is exercisable takes effect,

“the retirement condition” is met if the Secretary of State determines that regulation R2(3)(a) or regulation R3(5) (whichever applies) would have applied to the special class officer if the officer’s pensionable employment had terminated on the option day.

Increase in pensionable pay following exercise of option under regulation E11A

E11B.— (1) This regulation applies if, in a case where a member has exercised the option under regulation E11A—

(a) during the period of 12 months beginning with the day after the option day the terms on which the member holds the employment or employments referred to in regulation E11A(1)(a)(iii) change again, and

(b) as a result the member’s pensionable pay in that employment or those employments is increased (disregarding any increase in pensionable pay resulting from the member leaving a salary sacrifice arrangement) to more than 90% of the member’s pensionable pay during the period of 12 months ending with the option day, or

(c) following an increase referred to in sub-paragraph (b), the member’s pensionable pay in that employment or those employments is reduced (disregarding any reduction in pensionable pay resulting from the member entering into a salary sacrifice arrangement) to less than 90% of the member’s pensionable pay during the period of 12 months ending with the option day.

(2) In the circumstances referred to in—

(a) paragraph (1)(b), the amount of the member’s pension mentioned in sub-paragraphs (a), (b) and (c) of regulation E11A(5) (excluding any additional benefits) shall be abated to zero from the first pension day immediately following the day on which the level of the member’s pensionable pay increased,

(b) paragraph (1)(c), subject to any adjustments in accordance with sub-paragraph (c), the member shall again be entitled to receive payment of the full amount of the pension mentioned in sub-paragraphs (a), (b) and (c) of regulation E11A(5) as from the first pension day immediately following the day on which the level of the member’s pensionable pay reduced,

(c) where sub-paragraph (b) applies, before restoring the payment of a pension the Scottish Ministers shall have regard to the advice of the Scheme Actuary as to whether the amount of the pension should be adjusted in view of the length of time during which it was abated to zero in accordance with sub-paragraph (a).

(3) If the member was not in pensionable employment during the whole of the period of 12 months mentioned in paragraph (1)(b), that paragraph applies as if the member’s pensionable pay during that period were—

where—

• PP is the member’s pensionable pay for the part of that period during which the member was in pensionable employment, and

• N is the number of days in that period on which the member was in pensionable employment.

(4) If, in the opinion of the Scottish Ministers, had the terms and conditions of the member’s employment remained the same after the option day (apart from pensionable pay), the annual rate of pensionable pay for the employment as at the time of the change mentioned in paragraph (1)(a) would have exceeded the annual rate referred to in paragraph (1)(b)—

(a) paragraph (2)(a) does not apply, and

(b) this regulation applies as if paragraph (1)(b) referred to that annual rate instead of the actual annual rate.

(5) For the purposes of this regulation, if during the period of 12 months beginning with the day after the option day the member enters a further pensionable employment or employments—

(a) that event is treated as if the terms on which the member holds the employment in respect of which the option was exercised (“the option employment”) had changed again, and

(b) the member’s pensionable pay in the further employment is treated as an increase in the member’s pay in the option employment.

(6) In this regulation “the option day”, “additional benefits”, and “pensionable pay” have the same meaning as in regulation E11A(12) and (13).

Application of regulations E11A and E11B with modifications where concurrent part-time employments held

E11C.— (1) This regulation provides for the application of regulations E11A and E11B with modifications if a member is in pensionable employment in the 2015 Scheme in two or more part-time employments held concurrently on the option day.

(2) Those regulations apply in relation to each of the employments as if it were the only employment held by the member on that day, but subject to the following modifications set out in paragraph (3) to (8).

(3) In regulation E11A(1), for sub-paragraph (c) substitute—

“(c) as a result of that change, the sum of the annual rate of the member’s pensionable pay in that employment and every other employment held by the member on the option day is reduced (disregarding any reduction in pensionable pay resulting from the member entering into a salary sacrifice arrangement) to 90% or less of the sum of—

(i) the member’s pensionable pay in the employment during the period of 12 months ending with the option day, and

(ii) the member’s pensionable pay during that period in every other employment held by the member on the option day.”.

(4)  In regulation E11A(2)—

(a) after the words “2015 Scheme”, insert the words “in the employment or any other employment referred to in paragraph (1)(a)(iii)”, and

(b) after the words “that period”, insert the words “in that employment”.

(5) In regulation E11B(1), for sub-paragraph (b) substitute—

“(b) as a result the annual rate of the member’s pensionable pay in that employment is increased (disregarding any increase in pensionable pay resulting from the member leaving a salary sacrifice arrangement) to more than 90% of the sum of—

(i) the member’s pensionable pay in the employment during the period of 12 months ending with the option day, and

(ii) the member’s pensionable pay during that period in every other employment held by the member on the option day.”.

(6) In regulation E11B(3)—

(a) after “pensionable employment”, insert the words “in the employment or any other employment referred to in regulation E11A(1)(a)(iii) ”, and

(b) after the words “that period”, insert the words “in that employment”.

(7) In regulation E11B(4), after “referred to in paragraph (1)(b)”, insert “for that employment”.

(8) Where—

(a) a member’s pension is abated in accordance with regulation E11B(2)(a), in the circumstances described in regulation E11B(1)(b), and

(b) the member’s pensionable pay does not reduce in the manner described in regulation E11B(1)(c),

the pension will (in any event) be payable by the Scottish Ministers when the member retires, or partially retires again, from pensionable employment or attains the age of 75 and in doing so the Scottish Ministers shall—

(i) have regard to any pensions already paid, including any lump sum paid as a result of the member exercising an option under regulation E17 (general option to exchange part of pension for lump sum), and

(ii) take advice of the Scheme Actuary.

(9) In this regulation “the option day” has the same meaning as in regulation E11A(13).”.