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Your Scottish Teachers’ Superannuation Scheme has changed
To view details of the latest consultation exercise please use this link
The Scottish Teachers’ Superannuation Scheme changed with modifications and improvements which came into effect from 1 April 2007 for existing or new scheme members. For further details, please see below:
New changes applicable to scheme members in pensionable service from 1 April 2007
- Option for all members to take a retirement lump sum up to the new HM Revenue & Customs limit at retirement. If you wish to calculate the maximum pension and lump sum in your own case, the maximum pension and lump sum modeller is available as an Excel spreadsheet here
- The changes incorporate an increase in employee contributions from 6% to 6.4% and employer contributions from 12.5% to 13.5% from 1 April 2007.
- The In Service Death Gratuity has increased from two times pensionable salary to three times pensionable salary.
- There will be a new definition of pensionable salary for all members in service from 1 April 2007, where either the highest earnings in the last 365 days or the highest 3 consecutive revalued earnings in the last 10 years will be used in the calculation of retirement benefits. For those retiring between 1 April 2007 and 31 March 2009, the existing salary definition will apply if this is higher.
- Nominated survivor partner benefits are payable for those in service from 1 April 2007, subject to: a 2 year qualifying period, a nomination, and proof of dependency at date of death.
- Spouses, surviving civil partners’ and nominated dependent partners pensions are payable for life, subject to members being in service on or after 1 April 2007, otherwise pensions cease on re-marriage, civil partnership or co-habitation.
- There are two tiers of ill-health retirement benefits – Total Incapacity Benefit and Partial Incapacity Benefit
- Members are able to draw some of all of their pension benefits while continuing to work as a teacher in a reduced capacity taking at least a 25% reduction in salary. This is subject to the employer agreeing to the member's new working arrangement and certifying the reduction in salary.
- A new provision for enhancing your pension known as Additional Pension (this replaces Past Added Years for existing members, although existing elections will be honoured). Teachers' AVCs are also available from Prudential.
Definition of an Existing Member on 1 April 2007
Existing Member
- Teachers who are current scheme members on 31 March 2007.
- Teachers who have been out of pensionable service for more than five years, but who return to teaching by 31 March 2008 will retain a Normal Pension Age of 60 (irrespective of the length of break in service).
- There will be a minimum period of 30 days reckonable service or 60 days pensionable employment that must be undertaken after a break in service. This is to allow teachers who have a subsequent break in service to return at a later date and retain Normal Pension Age (NPA) 60 in respect of their future service.
Definition of a New Member on 1 April 2007
New Entrant
- Teachers who enter the scheme with no previous pensionable service to their credit.
- Teachers who re-enter pensionable service after 31 March 2008, following a break of service of more than five years will be subject to the provisions that apply to new entrants (benefits already accrued would still be payable at age 60).
Existing members and new entrants: scheme benefits
Existing Members |
New Entrants |
Normal Pension Age (NPA) remains at age 60 (no actuarial enhancement for working beyond age 60). |
Normal Pension Age (NPA) is age 65 (actuarial enhancement for working beyond age 65 has been introduced). |
Some changes affect existing scheme members and those who join on or before 31 March 2007. |
The changes affect new members from 1 April 2007 and existing members who have a break in service of more than five years. |
Actuarially reduced pension benefits are available from age 55. Reduction is on the basis of NPA 60. |
Actuarially reduced benefits are available from age 55. Reduction is on the basis of NPA 65. |
By April 2010, the Minimum Retirement Age (MRA) will be increased to 55. |
The Minimum Retirement Age (MRA) is age 55. |
Pension benefits continue to be calculated as 1/80th of pensionable salary for each year of pensionable service. |
Pension benefits are based on 1/60th of pensionable salary for each year of pensionable service. |
Pension lump sum is calculated as a minimum 3/80ths of final salary for each year of pensionable service, but there is more choice to take a higher tax-free lump sum, up to 25% of fund value, and a lower amount of pension. |
There is no automatic pension lump sum however, there is the option to take a tax-free lump sum, up to 25% of fund value, by surrendering £1 of pension for £12 of lump sum. |
There is the facility to buy up to £5,000 of additional annual pension. Facility to increase pension by buying past added years/current added years is no longer available (existing contracts honoured). |
An option to increase pension provision by buying up to £5,000 of additional annual pension. |
Pension benefits are based on the better of your pensionable salary in the last year or the average pensionable salary of the best three consecutive years in the last ten (re-valued in line with the Retail Prices Index (RPI)). |
Pension benefits are based on the better of your pensionable salary in the last year or the average pensionable salary of the best three consecutive years in the last ten (re-valued in line with the Retail Prices Index (RPI)). |
The death grant has been increased from two times pensionable salary to three times pensionable salary. |
The death grant is three times pensionable salary |
Spouses’, surviving civil partners’ and nominated dependent partners’ pensions are payable for life. |
Spouses’, surviving civil partners’ and nominated dependent partners’ pensions are payable for life. |
From 1 April 2007, employee contributions rise from 6% to 6.4% of salary. |
Employee contributions are 6.4% of salary |
From 1 April 2007, employer contributions rise from 12.5% to 13.5% of salary. |
Employer contributions are 13.5% of salary. |
There are two tiers of ill-health retirement benefits – Total Incapacity Benefit (TIB) and Partial Incapacity Benefit (PIB). |
There are two tiers of ill-health retirement benefits – Total Incapacity Benefit (TIB) and Partial Incapacity Benefit (PIB). |
Members are able to draw some or all of their pension benefits while continuing to work as a teacher in a reduced capacity taking at least a 25% reduction in salary. |
Members are able to draw some or all of their pension benefits while continuing to work as a teacher in a reduced capacity taking at least a 25% reduction in salary. |
Consultation
Consultation on The Teachers' Superannuation (Scotland) Amendment Regulations 2007 –14 February 2007 – closing date 23 February 2007
A consultation letter, draft SSI and commentary on the Teachers' Superannuation (Scotland) Amendment Regulations 2007 was issued on 14 February 2007. The consultation period will end on 23 February 2007.
View a copy of the consultation letter (pdf 73Kb)
View a copy of the draft Regulations (pdf 297Kb)
View a copy of the commentary (pdf 104Kb)
A summary of the responses received to the consultation below can be viewed by clicking on the following links:
STSS Consultation Summary 2007 - introduction
STSS Consultation Summary 2007 - responses to individual questions
Consultation – 3rd October 2006 – closing date 5th January 2007
The proposals for pension reform changes have now been agreed and a public consultation document was issued on 3rd October 2006. The consultation will end on 5th January 2007.
View a copy of the Consultation (pdf163Kb) . View the Response Form (Word-56Kb).
Read a series of FAQs (pdf 26Kb) which relate to issues the consultation raises.
You can now also download illustrative costs of buying £1,000 of Additional Pension as discussed in Section 3.3 of the consultation document.
Background
The initial review into teachers’ pensions started as a result of proposals in the Government’s Green Paper Simplicity, Security and Choice: Working and Saving for Retirement, published in December 2002. This proposed a package of reforms to ensure that people are adequately provided for in retirement and to encourage greater participation of older people in the workforce.
The Scottish Public Pensions Agency consulted on a number of options for reforms to the Scottish Teachers’ Superannuation Scheme in 2004. The responses indicated a very strong preference for the retention of a final salary pension scheme and for existing scheme members to retain a normal pension age of 60.
If you wish to access the previous consultation on the Review of the STSS (pdf 188Kb) (14th October 2004-14 January 2005) or the Summary of Responses (pdf 77Kb) .
Following the Public Service Forum (PSF) the Scottish Public Pensions Agency (SPPA) has taken an active part in meetings of the Teachers’ Pension Review Group (TPRG)*, as have the UK teachers’ unions and the 2 main Scottish teachers’ unions, the Educational Institute of Scotland (EIS) and the Scottish Secondary Teachers’ Association (SSTA). COSLA are aware of the proposals through the Management Advisory Group (Scotland) (MAG(S))** and this group have agreed to the issuing of the proposals for consultation.
The consultation exercise has already taken place in England and Wales and the proposals have been accepted by teachers, their employers and union representatives. The consultation exercise in Northern Ireland is already underway.
*Teachers' Pension Review Group (TPRG)
The Teachers' Pension Review Group was formed to consider how the provisions of the teachers' pension schemes can be modernised in the light of contemporary circumstances, Government policy, pension taxation framework, age equality and diversity legislation and the needs of teachers and their employers. The Group will ensure that amendments or developments to the scheme mean that members and employers continue to view the teachers' pension schemes as a valuable part of the overall remuneration package.
The Group comprises representatives of scheme managers for all 3 teachers' schemes, employers in England and Wales, teachers associations throughout the UK and the Government Actuary's Department.
**The Management Advisory Group (Scotland) (MAG(S))
The MAG(S) Group comprises representatives from SPPA, Scottish Government Education Department, Scottish teachers' employers and unions. The Group will consider the same proposals as the TPRG, but will also look at specific Scottish issues.
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SPPA
STSS Policy Branch
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Galashiels
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