The Teachers' Pensions Regulations 2010

CHAPTER 5 E+W+S Total incapacity benefits and cessation of ill health pensions etc.

Total incapacity benefits E+W+S

65.—(1) This regulation applies where—

(a) an ill-health pension becomes payable to a person (P) because P satisfies Conditions 1, 2 and 3 set out in paragraph 3 of Schedule 7 (Case C: ill-health retirement), and

(b) P satisfies Conditions A and B.

(2) P satisfies Condition A if P's ability to carry out any work is impaired by more than 90% and is likely to be impaired by more than 90% permanently.

(3) P satisfies Condition B if immediately before satisfying Condition A—

(a) P was in pensionable employment,

(b) P was paying contributions under regulation C9 of TPR 1997 or regulation 19 (election to pay contributions by a person serving in a reserve force), or

(c) P was taking a period of non-pensionable sick leave, a period of non-pensionable family leave or a career break which, in every case, followed on immediately after a period of pensionable employment.

(4) A total incapacity pension is payable to P from the entitlement day.

(5) Except as otherwise provided in these Regulations, the total incapacity pension is payable for life.

(6) Where P is a pre-2007 entrant, a total incapacity lump sum is payable to P on the entitlement day.

(7) The annual rate of the pension and the amount of the lump sum are to be calculated in accordance with regulation 66 (annual rate of total incapacity pension and amount of total incapacity lump sum).

(8) The entitlement day is the date on which the ill-health pension mentioned in paragraph (1) becomes payable to P.

Annual rate of total incapacity pension and amount of total incapacity lump sum E+W+S

66.—(1) The annual rate of the total incapacity pension of a person (P) is the sum of—

(a) the appropriate fraction x P's average salary x P's added service (in years and fractions of a year),

(b) where the amount of a lump sum paid (“the actual lump sum”) is less than the amount which would, apart from paragraph (3), be payable (“the notional lump sum”), such amount representing the value of the difference between the notional lump sum and the actual lump sum as the Secretary of State determines after taking advice from the scheme actuary.

(2) The total incapacity lump sum of a person (P) is 3/80 x P's average salary x P's added service (in years) less any amount referred to in paragraph (4).

(3) But no lump sum may exceed P's permitted maximum.

(4) Where the total of any benefits referred to in regulation 62(5) which fall to be deducted under regulation 62(2) from any lump sum exceeds the total of—

(a) any ill health lump sums, previously paid or payable at the same time as the total incapacity lump sum, and

(b) any total incapacity lump sum previously paid

the balance is to be deducted from the total incapacity lump sum.

(5) The appropriate fraction is—

(a) where P is a pre-2007 entrant, 1/80, and

(b) where P is a person with mixed service or a 2007 or later entrant, 1/60.

(6) P's added service is one half of the period beginning on the entitlement day and ending on the date on which P reaches—

(a) where P is a pre-2007 entrant, the age of 60, or

(b) where P is a person with mixed service or a 2007 or later entrant, the age of 65.

(7) The entitlement day has the same meaning as in regulation 65 (total incapacity benefits).

Cessation of total incapacity pension E+W+S

67.—(1) A total incapacity pension ceases to be payable to a person (P) if P's ability to carry out any work ceases to be impaired by more than 90%.

(2) Paragraph (1) does not apply if P has reached—

(a) where P is a pre-2007 entrant, the age of 60, or

(b) where P is a person with mixed service or a 2007 or later entrant, the age of 65.

(3) For the purpose of paragraph (1), P's ability to carry out any work is to be treated as ceasing to be impaired by more than 90% on the earliest of the following—

(a) the date on which P enters employment in a capacity mentioned in Schedule 2 (pensionable employment);

(b) the date on which P engages in work as a teacher (not being employment in such a capacity);

(c) the date on which P engages in any other form of work unless—

(i) P provides the Secretary of State with a certificate from a registered medical practitioner that, in the opinion of the practitioner, P continues to satisfy Condition A set out in regulation 65 (total incapacity benefits) despite engaging in such work, and

(ii) the Secretary of State determines that P continues to satisfy that Condition despite engaging in such work.

Cessation and reinstatement of ill-health pension (application received before 6th January 2007) E+W+S

68.—(1) This regulation applies to—

(a) an ill-health pension which became payable to a person (P) following an application received by the Secretary of State before 6th January 2007, and

(b) a pension which becomes payable in accordance with paragraph (5).

(2) A pension to which this regulation applies ceases to be payable if P—

(a) enters full-time employment in a capacity mentioned in Schedule 2, where the pension became payable before 1st April 1997,

(b) enters full-time or part-time employment in a capacity mentioned in Schedule 2, where the pension became payable on or after 1st April 1997, or

(c) otherwise ceases to be incapacitated.

(3) Paragraph (2) does not apply if P has reached the age of 60.

(4) Despite paragraph (2), any equivalent pension benefits continue to be payable.

(5) Where—

(a) a pension has ceased to be payable in accordance with paragraph (2), and

(b) P has not been in pensionable employment at any time after the pension first became payable

the pension becomes payable again from the day on which P reaches the age of 60 or, if at an earlier date P satisfies condition 4 in paragraph 3(5) of Schedule 7 (ability to carry out work impaired by more than 90%), from that date.

Cessation of ill-health pension (application received on or after 6th January 2007) E+W+S

69.—(1) This regulation applies to an ill-health pension to which regulation 68 (cessation and reinstatement of ill-health pension (application received before 6th January 2007)) does not apply.

(2) A pension to which this regulation applies ceases to be payable on the earlier of the following—

(a) the date on which the person to whom it is payable (P) enters employment in a capacity mentioned in Schedule 2;

(b) the date on which P engages in paid or unpaid work as a teacher (not being employment in such a capacity).

(3) Paragraph (2) does not apply where P is—

(a) a pre-2007 entrant who has reached the age of 60, or

(b) a person with mixed service or a 2007 or later entrant who has reached the age of 65.

(4) Despite paragraph (2)—

(a) any equivalent pension benefits continue to be payable, and

(b) where P is a person with mixed service who has reached the age of 60 but not the age of 65, that part of the ill-health pension mentioned in regulation 61(5)(a) and (d) (annual rate of phased retirement and retirement pension) continues to be payable.

Calculation of retirement benefits after ill-health pension ceases to be payable E+W+S

70.—(1) This regulation applies for calculating the retirement benefits of a person (P) if—

(a) the retirement pension which most recently became payable to P (“the previous pension”) was an ill-health pension,

(b) the previous pension ceased to be payable under regulation 68 (cessation and reinstatement of ill-health pension (application received before 6th January 2007) or 69 (cessation of ill-health pension (application received on or after 6th January 2007)), and

(c) P re-entered pensionable employment.

(2) The annual rate of the retirement pension is made up of—

(a) the annual rate of any ill-health pension which became payable before the previous pension and was calculated using an average salary greater than the previous average salary, and

(b) the annual rate of a pension calculated in accordance with regulation 61 (annual rate of phased retirement and retirement pension) except as provided in paragraph (4) and (5).

(3) The amount of any retirement lump sum is the amount of a lump sum calculated in accordance with regulation 62 (amount of phased retirement and retirement lump sum) except as provided in paragraphs (4) and (5).

(4) In regulations 61 (annual rate of phased retirement pension and retirement pension) and 62 (amount of phased retirement lump sum and retirement lump sum) references to P's reckonable service must be taken to—

(a) exclude reckonable service used in the calculation of any pension mentioned in paragraph (2)(a), but

(b) where the previous pension became payable to P following an application received by the Secretary of State before 6th January 2007, include any enhanced period determined in accordance with regulation 71.

(5) Where P's average salary on the date on which retirement benefits become payable (“the final average salary”) is less than the average salary at the date on which the previous pension became payable (“the earlier average salary”) then the average salary for the purposes of regulations 61 and 62 is—

(a) the earlier average salary, in relation to P's reckonable service used in the calculation of P's previous pension, and

(b) the final average salary in relation to the balance of P's reckonable service.

(6) For the purposes of paragraph (5) P's reckonable service used in the calculation of P's previous pension does not include any increase in reckonable service under regulation E8 of TPR 1997, or regulation 71.

(7) Where paragraph (5) applies and any phased retirement pension is payable to P then for the purpose of paragraph 13 of Schedule 7—

(a) where the phased retirement pension became payable before the previous pension became payable the reckonable service taken into account in the calculation of that phased retirement pension is to be treated as reckonable service referred to in paragraph (5)(a), and

(b) where the phased retirement pension became payable after the previous pension became payable—

(i) the reckonable service taken into account in the calculation of that phased retirement pension is to be treated as reckonable service referred to in paragraph (5)(b), but

(ii) where the reckonable service taken into account in the calculation of that phased retirement pension is more than the reckonable service referred to in paragraph (5)(b)—

(aa) no reckonable service falls within paragraph (5)(b), and

(bb) the balance of reckonable service taken into account in the calculation of that phased retirement pension is to be treated as reckonable service referred to in paragraph (5)(a).

Calculation of retirement benefits after ill-health pension ceases to be payable: supplemental E+W+S

71.—(1) This regulation applies where regulation 70(4)(b) applies.

(2) In this regulation—

(a) “P's assumed pensionable employment end date” means the earlier of—

(i) the date on which the pensionable employment of a person (P) would have ended if the further employment in respect of which the pension is payable had begun on the date when P fell within Case C in regulation E4 of TPR 1997 (as a result of which the previous pension became payable), and

(ii) P's 60th birthday,

(b) P's “relevant service” is so much of P's reckonable service as does not consist of periods—

(i) set out in sub-paragraphs (c) or (d) of regulation 41(1) (past added years), or

(ii) which count as reckonable service by virtue of the application to P of regulation 7 of TPR 1976 (war service), and

(c) “the previous pension” is the previous pension referred to in regulation 70(1)(a).

(3) For the purposes of this regulation, P is treated as having been in pensionable employment during any period during which P was paying contributions under regulation C9 of TPR 1997 or under regulation 19.

(4) P's reckonable service is treated as having been increased by the period specified in paragraph (4) or paragraph (5) (as appropriate) but this is subject to regulation 42(d) (limitation of reckonable service to 45 years).

(5) If P's relevant service is less than 10 years the period is the shorter of—

(a) the length of relevant service, and

(b) the period beginning on P's assumed pensionable employment end date and ending immediately before P's 65th birthday.

(6) If P's relevant service is 10 years or more, the period is the longer of period A and period B.

(7) Period A in paragraph (6) is the shortest of—

(a) the period by which P's relevant service falls short of 40 years,

(b) the period beginning on P's assumed pensionable employment end date and ending immediately before P's 60th birthday, and

(c) 6 years and 243 days.

(8) Period B in paragraph (6) is so much of the period beginning on P's assumed pensionable employment end date and ending immediately before P's 65th birthday as would not cause P's reckonable service to be increased to more than 20 years.

(9) Where P is a person with relevant mixed service the increase in P's reckonable service arising from this regulation is to be treated, for the purpose of regulation 48 (person with mixed service: meaning and normal pension age), as having occurred after the disqualifying break.

(10) In paragraph (9) P is a person with relevant mixed service where—

(a) the previous pensionable employment (which gave rise to the ill-health pension referred to in regulation 68 or 69) ceased before a disqualifying break, and

(b) P's re-entry into pensionable employment referred to in regulation 70(1)(c) occurred after that disqualifying break.

Reduction of ill health pension and total incapacity pension E+W+S

72.—(1) This regulation applies where—

(a) total incapacity benefits are payable to a person (P), and

(b) the ill health retirement benefits which are payable to P at the same time are increased pursuant to regulation 71.

(2) If it appears to the Secretary of State that the total of P's added service referred to in regulation 66 and any increased reckonable service referred to in regulation 71 is excessive in the light of the length of the period between the date on which the total incapacity benefits became payable to P and the date on which Case A would have applied to any of P's reckonable service (if regulation 65 had not applied), the Secretary of State may determine that—

(a) P's total incapacity benefits, or

(b) that part of P's ill health retirement benefits which arise from the application of regulation 71, or

(c) both P's total incapacity benefits and the part of P's ill health retirement benefits referred to in sub-paragraph (b)

are to be reduced to such amount as the Secretary of State considers appropriate.

(3) The Secretary of State may not make a determination under paragraph (2) which would have the effect that the aggregate of the values of P's total incapacity benefits and P's ill health retirement benefits would be less than the aggregate of the values of—

(a) P's incapacity benefits if they had not been reduced under this regulation, and

(b) P's ill health retirement benefits if they had been calculated without any increase under regulation 71.

(4) The Secretary of State must take advice from the scheme actuary before making any determination under this regulation.