The Teachers' Pensions Regulations 2010

PART 5 E+W+S Average salary

Average salary: teacher in pensionable employment, etc. on or after 1st January 2007 E+W+S

37.—(1) This regulation applies to a person if—

(a) the person was in pensionable employment on or after 1st January 2007, or

(b) the person was paying contributions under regulation C9 of TPR 1997 or regulation 19 (election to pay contributions by a person serving in a reserve force) on or after that date.

(2) The average salary of a person (P) to whom this regulation applies is the greater of—

(a) P's relevant salary during the last 365 days of P's average salary service, and

(b) the average annual rate of P's relevant salary during P's best salary period multiplied by A/B.

(3) But if P has average salary service of less than 365 days, P's average salary is the average annual rate of P's relevant salary during such service.

(4) In calculating the period mentioned in paragraph (2), no account is to be taken of a leap day.

(5) But where P's average salary service ends on or after the leap-day in a leap year, account is to be taken of that leap day in calculating those periods.

(6) Except as provided in paragraphs (7) and (8), P's best salary period is the 1,095 consecutive days of P's average salary service falling within the period of 10 years ending on the last day of P's average salary service (the “10-year period”) during which P's increased relevant salary is the greatest.

(7) Where P has more than 365 and less than 1,095 days of average salary service falling within the 10-year period, P's best salary period is the number of days of P's average salary service falling within the 10-year period.

(8) Where P has more than 365 days of average salary service but has less than 365 days of average salary service falling within the 10-year period, P's best salary period is the last 365 days of P's average salary service.

(9) P's increased relevant salary during any period is P's relevant salary during that period calculated as if P's relevant salary during any relevant salary period were increased by the amount (if any) by which, immediately before the end of P's average salary service, it would have been increased if it had been an official pension within the meaning of section 5(1) of PIA 1971 beginning, and first qualifying for increases under that Act, on the same day as the relevant salary period ended.

(10) In paragraph (9) a “relevant salary period” means a period during which the rate of P's relevant salary does not change.

(11) A is the average annual rate of P's increased relevant salary during the best salary period.

(12) B is the amount to which the average annual rate of P's relevant salary during the best salary period would have been increased up to the last day of P's average salary service if it had been an official pension within the meaning of section 5(1) of PIA 1971 beginning, and first qualifying for increases under that Act, on the same day as the best salary period ended.

Average salary: teacher not in pensionable employment etc. after 31st December 2006 E+W+S

38.—(1) The average salary of a person (P) to whom regulation 37 (average salary: teacher in pensionable employment, etc. on or after 1st January 2007) does not apply is the greatest amount which is P's relevant salary during any 365 consecutive days of P's average salary service falling within the last 1,095 days of such service.

(2) But if P has average salary service of less than 365 days, P's average salary is the average annual rate of P's relevant salary during such service.

(3) In calculating the period of days mentioned in paragraph (1) or (2), no account is to be taken of a leap-day.

(4) But where a person's average salary service ends on or after the leap-day in a leap year, account is to be taken of that leap-day in calculating those periods.

Restriction on average salary E+W+S

39.—(1) This regulation applies for calculating the average salary of a person (P), except where P dies in pensionable employment.

(2) For the purpose of regulation 37(2)(a)—

(a) if P's relevant salary during the last 365 days of P's average salary service is greater than RS2 + I, P is to be treated as receiving relevant salary during that period of an amount equal to RS2 + I;

(b) where P has more than 730 days of average salary service, if P's relevant salary during Year 2 is greater than RS1 + I, P is to be treated as receiving relevant salary during Year 2 of an amount equal to RS1 + I;

(c) where P has more than 1095 days of average salary service, if P's relevant salary during Year 1 is greater than RS0 + I, P is to be treated as receiving relevant salary during Year 1 of an amount equal to RS0 + I.

(3) In paragraph (2)— I is the greater of—

(a) the fixed amount—

(i) determined in accordance with paragraph (4) (where the last day of P's average salary service falls before 31st March 2011 ), or

(ii) relating to the financial year in which the last day of P's average salary service falls, determined in accordance with paragraph (5), in any other case, and

(b) 10% of the annual rate of the salary to which I is added;

RS0 is the average annual rate of P's relevant salary during Year 0; RS1 is the average annual rate of P's relevant salary during Year 1 or, where paragraph (2)(c) applies, the relevant salary during Year 1 which P is to be treated as receiving in accordance with that sub-paragraph; RS2 is the average annual rate of P's relevant salary during Year 2 or, where paragraph (2)(b) applies, the relevant salary during Year 2 which P is to be treated as receiving in accordance with that sub-paragraph.

(4) The fixed amount where the last day of P's average salary service falls before 31st March 2011 is £ 5,000.

(5) The fixed amount where the last day of P's average salary service falls in the financial year ending on 31st March 2012 or any subsequent financial year is the fixed amount relating to the financial year before that financial year (“the previous financial year”) multiplied by the factor mentioned in paragraph (6), if that factor is greater than 1, rounded to the nearest £100 (and for the purpose of this paragraph £5,000 is to be treated as the fixed amount relating to the financial year ending on 31st March 2011).

(6) The factor is RPI1/RPI2, where—

(7) RPI 1 is the retail prices index for February in the previous financial year, and

(8) RPI 2 is the retail prices index for February in the financial year before the previous financial year.

(9) This regulation is subject to paragraph 23 of Schedule 13.

(10) In this regulation—

“Year 0” means the 365 days of P's average salary service preceding Year 1 or, where P has less than 1,460 days of average salary service, the number of days of P's average salary service preceding Year 1;

“Year 1” means the 365 days of P's average salary service preceding Year 2 or, where P has less than 1,095 days of average salary service, the number of days of P's average salary service preceding Year 2;

“Year 2” means the 365 days of P's average salary service preceding the last 365 days of P's average salary service or, where P has less than 730 days of average salary service, the number of days of P's average salary service preceding the last 365 days of P's average salary service.

Average salary: supplemental E+W+S

40.—(1) This regulation has effect for the purposes of regulations 37 (average salary: teacher in pensionable employment etc. on or after 1st January 2007) and 39 (restrictions on average salary).

(2) The average salary service of a person (P) is—

(a) any period spent by P in pensionable employment;

(b) any period in respect of which P has paid contributions under regulation C9 of TPR 1997 or under regulation 19 (election to pay contributions by a person serving in a reserve force);

(c) any period spent by P in comparable British service—

(i) which began before 1st April 1974,

(ii) which has not been followed by a period of pensionable employment, and

(iii) in respect of which the Secretary of State has not paid a transfer value.

(3) For the purpose of paragraph (2)(a) where P is employed under a contract for irregular work, P must not be treated as being in employment during any period when P does not undertake work.

(4) A period of average salary service may be discontinuous.

(5) Except as provided in paragraphs (6) to (8), the relevant salary of a person (P) is—

(a) for any period mentioned in paragraph (2)(a), P's contributable salary or, where the period relates to part-time employment, the full-time equivalent of P's contributable salary;

(b) for any period mentioned in paragraph (2)(b), the notional salary by reference to which P paid contributions or, where the notional salary relates to part-time employment, the full-time equivalent of the notional salary;

(c) for any period mentioned in paragraph (2)(c) and (d), the salary by reference to which P's pension would have been calculated under the rules of the pension scheme relating to the comparable British service.

(6) Where P is in pensionable employment under more than one contract for part-time employment at the same time (“concurrent employment”), P's relevant salary during any period in which the annual rate of the full-time equivalent of P's contributable salary under each such contract does not change (“the relevant salary period”) is A/B, where—

• A is the sum of E for each contract,

• B is the sum of E/FTE calculated in relation to each contract,

• E is P's contributable salary during the relevant salary period, and

• FTE is the annual rate of the full-time equivalent of P's contributable salary during the relevant salary period.

(7) For the purpose of paragraph (6)—

(a) a “contract for part-time employment” includes a contract for irregular work;

(b) where P is employed under a contract for irregular work, P is to be treated as being in pensionable employment during any period when P does not undertake work.

(8) But where one of the contracts of employment mentioned in paragraph (6) is a contract for irregular work and another is not, P's relevant salary during concurrent employment is the greater of—

(a) the average annual rate of P's relevant salary calculated in accordance with paragraph (6), and

(b) the average annual rate of P's relevant salary calculated in accordance with paragraph (6) as if any contract for irregular work were disregarded.

(9) For the purpose of this regulation, P's contributable salary in any pensionable employment—

(a) includes any amount by which P's salary is reduced during sick leave or adoption, maternity, parental or paternity leave;

(b) includes for any period beginning after 31st July 1975 and ending before 1st August 1978 any sum which would have been payable to P but for the limits on remuneration mentioned in section 1 of the Remuneration, Charges and Grants Act 1975 M1 ;

(c) is for any period beginning after 31st March 1979 and ending before 1st September 1980 P's notional salary under the Teachers' Superannuation (Notional Salaries) Regulations 1981 M2 .

(10) For the purpose of this regulation, the notional salary mentioned in paragraph (5)(b)—

(a) includes for any period beginning after 31st July 1975 and ending before 1st August 1978 any sum by reference to which the notional salary would have been calculated but for the limits on remuneration mentioned in section 1 of the Remuneration, Charges and Grants Act 1975;

(b) is for any period beginning after 31st March 1979 and ending before 1st September 1980 P's notional salary under the Teachers' Superannuation (Notional Salaries) Regulations 1981.

(11) In this regulation a “contract for irregular work” means a contract of employment pursuant to which the employee is available for work but undertakes and is paid for work only when and for periods requested by the employer.

Marginal Citations

M1 1975 c. 57; section 1 was amended, and the period for which it had effect extended to end with 31st July 1978, by the Price Commission Act 1977 (c.33), section 17; references to limits set out in documents laid before Parliament in 1976 and 1977 were added by S.I. 1976/1097 and 1977/1294.

M2 S.I. 1981/934