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Contributions
Can I pay additional contributions?
Can I increase the pension my dependants will receive?
Can I restore service if I had my contributions returned?
What do I pay?
As a member of the STSS you will pay 6.4% (as at 01 April 2007) of your salary towards a package of benefits. Your employer pays a further 14.9 % (as at 01 April 2009). This makes a total of 21.3%. You will receive income tax relief on your contributions. The Government Actuary reviews these rates at regular intervals.
How do I pay?
Your employer will deduct contributions from your monthly salary. Your employer will pay all contributions direct to the SPPA each month. It is important that you make sure that the correct amounts have been deducted. If you think an error has been made, contact your employer immediately.
Can I pay additional contributions?
There are four ways in which you can increase your retirement benefits by paying extra contributions. You can:
- Purchase additional pension;
- Pay Additional Voluntary Contributions (AVCs) through the Prudential;
- Pay Free-Standing Additional Voluntary Contributions (FSAVCs);
- Pay into a stakeholder pension.
In certain circumstances, you can also choose to pay extra contributions to increase the amount of family benefits your dependants may receive.
You can get tax relief on your additional contributions. If you make a lump sum payment you should contact Her Majesty’s Revenue and Customs (HMRC) for information on tax relief.
Purchasing additional pension
You can purchase additional pension that is paid separately from your STSS benefits. When you retire your eventual retirement benefits may attract ‘Pensions Increase’, which means they are index-linked. The additional pension you purchase will attract Pensions Increase in the same way as your STSS benefits.
The cost of purchasing additional pension depends on your age and the amount of additional pension you wish to receive.
There are two ways you can pay for additional pension:
- by having deductions from your salary; or
- by paying a one off lump sum.
If you would like a rough guide to how much Purchasing Additional Pension would cost, you may find this Additional Pension Calculator useful.
To apply to Purchase Additional Pension please complete the application form STSS: (APB PRE)
AVCs through the Prudential
The STSS has a special arrangement with the Prudential. The Prudential invests your AVCs and the profits (on which you do not pay income tax or capital gains tax) are added to your account.
The Prudential cannot guarantee your profits in advance, but each year they will send you a benefits statement so that you can see how your investments are performing. You can pay AVCs to increase your own pension, a dependant’s pension, the lump-sum death grant - or any combination of these three.
You can contact the Prudential direct for more detailed information at:
Prudential Life and Pensions
Teachers’ AVCs
Craigforth
Stirling
FK9 4UE
or visit their web site,
www.pru.co.uk/teachers/
Free-Standing AVCs
There are a number of other insurance companies that offer a FSAVC scheme. You can choose to pay your AVCs into a personal policy with any company of your choice. You can get more details direct from companies offering this kind of arrangement.
We cannot advise you about which type of extra contribution to choose. You can get advice from an independent financial adviser or from your Professional Teachers’ Association.
LighthouseGP Ltd is an Appointed Representative of Falcon Group plc, which is authorised and regulated by the Financial Services Authority and that the company is recommended by the Association of Headteachers and Deputies in Scotland.
SPPA do not offer financial advice nor do they recommend a preferred source for receiving advice. On the recommendation of AHDS a link to LighthouseGP Ltd is provided however by providing this link SPPA do not imply that they are endorsing the services or products of LighthouseGP Ltd. Links made to other sites are used at your own risk and SPPA accept no liability for any linked sites.
Stakeholder pensions
Members of the STSS can contribute to a stakeholder pension as well as joining the STSS. If you wish to take out a stakeholder pension you need to make your own arrangements.
Can I increase the pension my dependants will receive?
If you are a married man all your service from 1 April 1972 will automatically count for family benefits. You can purchase service before 1 April 1972 so that this also counts for family benefits if you marry for the first time before you retire.
If you are a married woman all your service from 6 April 1988 automatically counts for family benefits. You can purchase service before April 1988 within six months of getting married or if you married whilst out of service within 6 months of returning to service. You should contact us immediately if this applies to you.
If you have registered a Civil Partnership all your service from 6 April 1988 automatically counts for family benefits. If you are in a civil partnership and are in service, you can purchase previous service for family benefits if you apply to the SPPA within six months of registering your civil partnership. If you were not in service when you registered, you may do so by applying within six months of returning to service.
If you are living with a partner you can nominate your partner to receive family benefits after your death. Service from 1 April 2007 will automatically count for family benefits. You can purchase service before that date within six months of nominating your partner. There will be a check undertaken after your death to ensure the conditions of nomination are still satisfied. If your partnership ends you must inform us.
If you are a single teacher you can nominate a close relative who is financially dependent on you to receive benefits when you die, provided that financial dependency still applies at the time of your death. When you make the nomination, you can also choose to pay extra contributions for a higher pension. The person you nominate will not be entitled to benefits if you marry, enter a civil partnership or nominate your partner.
If you would like to Purchase Additional Service for family pensions please complete the application form STSS: (PFBS)1
Can I restore service if I had my contributions returned?
If you are in pensionable employment you can repay to the STSS any contributions you withdrew before 1 June 1973. You will have to pay compound interest on the contributions at the rate of 3.5% for each year since the refund was made. This service will then be reinstated into the STSS and will count in the normal way when we calculate your retirement pension and lump sum.
To apply to Repay Previously withdrawn contributions you should complete application form STSS: (RPWC) 1