Your guide to teachers pensions

Transcription

1 Your guide to teachers pensions Employer guide

2 Contents 1. We need you To spread the word To keep them up to speed To fulfil statutory requirements To decide who s a scheme member To tell who isn t a scheme member To help keep our records up to date To keep in touch with us Mem ber management New appointments Auto Enrolment Annual Return Information Annual Allowance Reading a Service Record Opt-outs Re-joining after previously opting out Absences from teaching Leavers Member divorce or dissolution Types of retirement (other than ill health) Retired teachers and re-employment Death of a member in service Scheme administration Updates to member details Managing contributions Providing service, salary and additional contributions information Providing service and salary information Contributions Providing service and salary information End of Year Certificate (EOYC) Audit Certification National Insurance Section 1: We need you... Employer guide 2

3 1. We need you One of the most important tools a school has for attracting and retaining teachers is the Teachers Pension Scheme. It s a key motivator for your teachers and you shouldn t be shy about promoting the life-long benefits of membership to them. Relatively few teachers know enough about this important part of their remuneration package. As someone who administers the scheme, you have a vital part to play not just in helping to manage teachers pensions, but also in highlighting the benefits to teachers. That s why this guide aims to do three things. The first is to set out as clearly as possible what your responsibilities are to both your teachers and the scheme itself. The second is to give you all the information and support you need to do your job. The third is to remind you to use every opportunity to promote the Teachers Pension Scheme to your teachers and explain its relevance to them throughout their careers. It s a responsible job and you re busy. So let s get started. Section 1: We need you... Employer guide 3

4 1.1 To spread the word. One of the most important things you can do is simply make your teachers aware of the lifelong benefits of the scheme including the help that s available to plan their retirements. Here are five things every teacher should know about their pension: Their pension doesn t just give them a regular income after retirement it can also provide their families or other dependants with financial protection should they die. They have the option of taking phased retirement, which may better suit their lifestyle. If they become too ill to work, they may receive their pension early. They can buy extra pension credit to increase their pension or in some cases even transfer pension credit across from another scheme. If they joined the scheme on or after 1 January 2007, they can choose to have part of their pension paid as a one-off lump sum. If they joined before this, they ll get a lump sum automatically. 1.2 To keep them up to speed. Teachers join. Teachers leave. Regulations and guidelines change. Nothing stands still. So here are some easy ways to make sure your teachers are kept abreast of anything that could affect them. Get them to register online via My Pension Online. This is vital. Most people do at least some of their banking online and your teachers should be encouraged to view their pension in the same way. Once registered, we can them important updates automatically. Make sure they use the resources provided, such as the Member Guide, fact sheets and, most of all, our website. Everything they need is there. So give them the tools and you ll save yourself a lot of time. Use their payslips to keep your teachers aware of the value of their pension. They can immediately see the pension contributions you are making. Pensions are all about people. So make sure your teachers know that they have to tell you about changes to their personal circumstances. Like if they ve moved in with their partner. Encourage members to review their pension position by, for example, making them aware of the pension calculators on our website. That way, if they ever choose to opt out, they ll know what they re giving up. Finally, encourage and support members to actively plan for their retirement. Section 1: We need you... Employer guide 4

5 1.3 To fulfil statutory requirements. As you d expect, the administration of the Teachers Pension Scheme is subject to statutory requirements, supervised by the Pensions Regulator. They have the power to impose fines on schemes and employers (and their individual managers) who fail to adhere to them. The Disclosure Regulations require us to: Pay pension benefits within one month of entitlement. So it s imperative that you ensure application forms are completed and forwarded to us promptly, if possible as much as four months before the date of retirement. Provide estimates of retirement benefits to teachers within two months of request. Provide benefit statements to all active members on an annual basis following the completion of the annual return. The Transfer Regulations require us to: Calculate a guaranteed transfer value within three months of request by a teacher. Another reason why it s important you provide up-to-date and accurate information quickly. To provide a quotation of a transfer value within three months of leaving to teachers with less than two years service plus inform them of the amount of contributions and interest they would receive if they took a repayment. This is why any leaver returns (Form TR8) must be sent to us promptly. In addition, all of our computerised records are registered under the Data Protection Act. It means we have to keep all the information we hold in the strictest confidence. It also means we have to securely store, maintain and update any information necessary to calculate an individual teacher s entitlement under the Teachers Pensions Regulations. We also collect certain information in respect of individual teachers who are not members of the Teachers Pension Scheme, some of which is required for statistical purposes. 1.4 To decide who s a scheme member. You decide whether somebody is eligible for the scheme based on the role they are employed in regardless of whether or not they work on a full or part-time basis, unless they have previously opted out. There are three types of membership, depending upon when the member joined the scheme: Members with a Normal Pension Age of 60 Teachers who were current scheme members on 31 December Teachers who have been out of pensionable service for more than five years, but who returned to teaching by 31 December 2007 and are existing members irrespective of the length of break in service. Teachers who have left service and returned at a later date. They remain as existing members, with a normal pension age of 60 in respect of their future service, if they return not more than five years later and they accrue a minimum period of 30 days of reckonable service or 60 days of pensionable employment. Teachers with service in the Scottish or Northern Ireland teacher pension schemes prior to 1 January If this is transferred into the Teachers Pension Scheme they may be classed as an existing member. Members with a Normal Pension Age of 65 Teachers who enter the scheme for the first time on or after 1 January Teachers who have transferred their benefits out of the Teachers Pension Scheme and then return to teaching will be treated as members with a normal pension age of 65 regardless of whether or not they transfer their service back into the Teachers Pension Scheme. As well as the statutory requirements above, you also have duties under the Teachers Pension Scheme regulations. See section 3 of this document for further details. Section 1: We need you... Employer guide 5

6 1.4 To decide who s a scheme member. (continued) Mixed-service members (Normal Pension Age 60 and 65) Since 31 December 2007 teachers who re-enter pensionable service, following a break in service of more than five years, have been treated as members with a normal pension age of 65 with regard to future service. However, they will retain a normal pension age of 60 in respect of benefits attributable to their previous service. Full-time employment Quite simply, employment is classed as full time if the teacher works the full week on one contract. Work is automatically pensionable unless the teacher opts out or has previously opted out. If a teacher doesn t want to contribute to the Teachers Pension Scheme they can choose to make alternative arrangements by opting out. Part-time employment Part-time employment is where the employee works for less than the whole working week. It s automatically pensionable and contributions must be deducted. Unless either of these applies: The teacher has opted out of the scheme. The teacher has a full-time job which is also subject to the Teachers Pension Scheme and is in addition to the part-time employment. In these circumstances, the part-time employment is not classed as pensionable employment. Other part-time scenarios If an existing part-time teacher starts a new contract or there is a material change in a contract which began before 1 January 2007 (which you ll have to determine), they will automatically become scheme members. Any other teaching employment (current or future) will also be pensionable from the start of the contract. Any other employers must be notified immediately of the need to deduct Scheme contributions. A part-time teacher who was in employment prior to 1 January 2007 may have previously completed an election for their service to be treated as pensionable. A teacher who does not change contract and has not previously elected to join the scheme, will not automatically become a scheme member. However, they can still choose to join now or at any time in the future. Local Authority (LA) Organisers If they ve been employed prior to 1 January 1977 and want to remain in the scheme they can continue to contribute provided they haven t had a break in service. Outsourcing their area of work to a function provider is a change of contract and they're no longer entitled to be in the Teachers' Pension Scheme. Section 1: We need you... Employer guide 6

7 1.5 To tell who isn t a scheme member. There are four simple ways to tell if someone isn t part of the scheme: They ve opted out. They re under 16, or 75 and over. They re subject to the Local Government Pension Scheme (LGPS). They ve been in continuous employment (i.e. with breaks of less than twelve months) with an LA and in service which was formerly treated as pensionable in the LGPS. This doesn t apply if they ve elected to join the Teachers Pension Scheme within three months of the start of a new contract. In practice people in this category will have continuously been employed in the same post(s) since before 1 January Exceptions to the above include: They are paid salary in full or are on sick leave. Maternity or paternity leave. Parental or adoption leave and are entitled to be paid not less than half pay. Entitled to statutory adoption, maternity or paternity pay. 1.6 To help keep our records up to date. On behalf of the Department for Education, we maintain a database of teachers employed in England and Wales. The service and salary information we hold here is used to calculate things such as retirement benefits or transfer values. You are a critical part of the process because it contains information collected from you, both annually and also when teachers enter or leave your employment. Accuracy is vital. We do make validation checks but we re obviously relying on you to give us complete and precise information. Service history As part of their Annual Benefit Statement, every teacher gets a summary of their service history. Each teacher s record contains the following data: Teacher s reference number. Full name. Date of birth. National Insurance number. Teacher status. Total pensionable service. Full details of employment since 1 April Running totals for pre-1 April 1962 service. Teachers Pension Scheme pension events are also recorded, such as elections to pay additional pension contributions. If one of your teachers thinks that their records are in any way wrong, they should contact you first. It s your responsibility to bring it to our attention and we ll make any necessary amendments. You may obtain a copy of a teacher s record using the Employer Portal. Section 1: We need you... Employer guide 7

8 1.7 To keep in touch with us. Good communication between you and your employees is obviously vital to the smooth administration of the scheme. As is secure communication between you and the Teachers Pension Scheme. That s why you have the Employer Portal at your disposal to exchange sensitive data between stakeholders. Using the Employer Portal The Employer Portal allows data holders like you to send and receive data about scheme members swiftly and safely. It also provides a channel for you to authorise applications from your teachers that have been made online. To use the Employer Portal you need to register first by ing a request to tpstu@teacherspensions. co.uk. We will issue you with a confidential password and PIN. Once you have received these you will be able to log in to either upload a file from your local machine or to retrieve a file that is waiting for you. High levels of security must be maintained and you must not share your passwords with colleagues. When a staff member no longer requires access to the Employer Portal, tell us immediately so that their details can be cancelled. New login details should be requested for any replacement. Multiple users Where you have multiple users, creating a global address for web form notifications to be issued provides a central contact point. If you want to work this way please confirm the global address to tpstu@teacherspensions.co.uk. It has several advantages over an individual address. For instance, it avoids scenarios where a colleague is absent from work and potentially important information or requests are left untouched in their inbox. It is good practice anyway to access your account daily to check for incoming information or applications from the Teachers Pension Scheme or your teachers. Other access to the Employer Portal Where partnership agreements exist between an employer and an outsourced payroll provider, they can enjoy full access to the the Employer Portal facility and sign and send forms (e.g. retirement forms, additional pensions forms) directly to us if you're happy for them to do this. As the employer you still remain responsible for their actions. Where more individual arrangements are in place, such as a school, or group of schools within a Local Authority using the same outsourced payroll provider, it would be expected that all forms are authorised by the Local Authority. Access to the Employer Portal for the payroll provider would be granted, with the permission of the Local Authority. Get in touch with your Employer Relationship Manager (ERM) We have a dedicated team of Employer Relationship Managers to help employers like you. Each one is responsible for a particular region in England or Wales and one of them will be dedicated to providing you with a number of services. Things you can get from your ERM 1 Face-to-face regional seminars onsite clinics. 3 Webinars. 4 E-Learning Modules. 5 Personal visits that support you with the administration of the pension scheme. 6 Advice and support. Other ways of keeping in touch To find out who your ERM is, visit our website: Alternatively, call the Employer Helpline on If you re contacting us about a teacher, it really speeds things up if you have the following information to hand: The teacher s reference number. (such as RP99/99999). Full name. Date of birth. National Insurance number. Section 1: We need you... Employer guide 8

9 2. Member management This section of the guide sets out in a very clear way how you should manage the specific scenarios you are likely to encounter in your job. We ve identified nine of them. They start with the appointment of a new teacher and go right through to a member s death. Each section begins by telling you what you should do in a particular eventuality. Where necessary, it then goes on to tell you exactly how you should be doing it. Follow the instructions and you can t go far wrong. And as ever, if you don t understand anything, just ask us. Section 2: Member management Employer guide 9

10 2.1 New appointments. What you should do 1 Inform the teacher that they are automatically a member of the Teachers Pension Scheme and that contributions will be deducted from their salary. Provide them with information about the Scheme, by providing a link to our website. 2 Promote the benefits of the scheme, how it can help provide for them in their retirement and may be an income for their family after they re gone. 3 Inform them about the dedicated resources available on the scheme website, such as their Member Guide. Encourage them to register for online access to their pension account. It will enable your members to keep up to date with their pensions. 4 Tell us when you appoint a new teacher by using the TR6 template on the Employer Portal. What s more, tell us immediately if you appoint a new teacher who then doesn t take up their post. Tell them to think very carefully about any decision to opt out. Urge them to compare and contrast the benefits of their current scheme with any alternative arrangements. Advise them to consult an Independent Financial Advisor or their Teachers Association first. If a teacher still wishes to opt opt out of the Scheme they can do so at any time. 5 Tell them that, if they choose, they can elect to opt out of the scheme by completing the form on the secure member section of our website: My Pension Online If they ve previously done this and you re satisfied they have already opted out, you shouldn t take any pension contributions from their salary. Appointing a member who s receiving retirement benefits If you appoint a member who s receiving retirement benefits, you should tell us (as you should with any other member). Retired members who are re-employed will become active members again whether they re in full or part-time employment. Contributions should be collected from their salaries unless they opt out. Here are three things to remember: Unless you notify us of all appointments, teachers could be overpaid their pension which they ll then have to pay back. So please make sure that those teachers who need to complete a certificate of re-employment do so. They have to do it themselves and they ll find the certificate in the secure member area of our website, My Pension Online It has to be completed annually or whenever there is a salary change. Any teacher taking phased retirement and then returning to employment has to earn at least 20% less than their previous earnings for a minimum of 1 year. Their future service is automatically pensionable and not subject to abatement unless they have retired on Phased grounds after reaching their Normal Pension Age. If the teacher is receiving the scheme s ill health retirement benefits these will stop immediately in most cases even if they re employed for a single day. That s another reason to ensure the teacher is fit for teaching before making the appointment. How to complete a new appointment Notify us immediately by completing the Employer Portal TR6 template. Download To download a TR6, click on Download a File on the left-hand side. Click on the document you wish to download. Then click on Save when the message box appears. This will save the document to your computer. Note where you re saving the document (e.g. My Documents). If you do not get the option to select save, right click the document file name on the Employer Portal and select Save target as. This will then display a save dialogue box. Once this appears, save the file to the desired location. You must only use the templates currently held on the Employer Portal to send information to us. These files must be saved in a CSV format. If files are uploaded in an incorrect format, these cannot be processed automatically and will be returned to you to resubmit. Section 2: Member management Employer guide 10

11 2.1 New appointments. (Continued) Upload To upload a completed TR6, click on Upload a File. Input a description for the file to be uploaded then click on browse to search for the desired file. Note: if you are uploading a TR6, the file name must start with TR6, and not contain commas or brackets. Please do not change the file name. Appointment Statements are generated during this process; they are created as files for you to access. On receipt of the appointment notification, an Appointment Statement will be available to you to download from STU provided that there are no errors in your notification. If errors are identified you will receive a notification to correct the error and resubmit the corrected information. 2.2 Auto Enrolment Any new employees are to be contractually enrolled into the Teachers Pension Scheme under the Scheme provisions, as explained in 2.1 New appointments. If your organisation has reached or passed their Auto Enrolment date they re also considered to be autoenrolled as required under Auto Enrolment legislation. There is a toolkit, communication pack and example template letters on our website to assist you with your Auto Enrolment duties. This is located in the employers section under Training and Resources and Auto Enrolment. If you know when your organisation s Staging Date is please notify us by completing the Auto Enrolment Staging Date Template on the Employer Portal. You must identify employees who require alternative pension provision because they are not eligible to join the Teachers Pension Scheme and take appropriate action. If you are auto enrolling an employee into the Teachers Pension Scheme: What you should do Write to the employee providing information as illustrated in the example letters referred to above. Provide them with access to scheme information which may be by providing them with a link to our website. Promote the benefits of the Scheme, how it can help provide for them in their retirement and may be an income for their family after they re gone. Inform them about the dedicated resources available on our website, such as their Member Guide. Encourage them to register for online access to their pension account My Pension Online. It will enable your members to keep up to date with their pensions. Tell us when you auto enrol a new teacher or an existing teacher who is not in the Scheme by using the Auto Enrolment Template available on the Employer Portal. Deduct contributions. Section 2: Member management Employer guide 11

12 2.2 Auto Enrolment (Continued) Tell them to think very carefully about any decision to opt out. Urge them to compare and contrast the benefits of their current scheme with any alternative arrangements. Advise them to consult an Independent Financial Advisor or their Teachers Association first. If the teacher still wishes to opt out of the scheme they can do so at any time. Tell them that they have to make their own opting out election. For further information about opting out see 2.6 Opt-outs. Also see 2.7 about re-joining after opting out. You must re-enrol those who have opted out of the Scheme on the 3rd anniversary of your Staging Date, unless transitional delay applies to them. 2.3 Annual Return Information. Each year we need you to provide service and salary information about your teachers regardless of whether they are members of the Scheme or not. This information must be with us no later than the 6 July following the 31 March of that year. We use the information to update teachers records, provide a Benefit Statement to your teachers and to issue them with Pension Saving Statements if applicable. Pension Saving Statements must be issued to affected teachers by the 6th 0ctober to allow them to notify HMRC of any Tax Charges on their self assessment tax returns. If you don't provide the required information by 6 July, you can incur substantial charges from HMRC. If a member also submits a late tax they could incur penalties which they will ask you to pay if it's as a result of you providing the service and salary information to us late. Your Return should include the following information and you can submit this through the Employer Portal. In order to submit the Annual Return, you must first access the Employer Portal. Once you have accessed the Employer Dashboard page, please follow the link highlighted as Upload a file (STU) to the left of the site. Please select the establishment you wish to upload the file to, by highlighting the name of the establishment from the drop down list headed Data Centres. Press the browse button and select the Annual Return file. The file name should start with the word SCHEDPRINT, unless the file was produced using the PC Application software, which would start with either P or TCHINF.The file location will then appear in the browse field. You ll then be required to give the file a description. Please be aware that the system will not accept a description which contains symbols (e.g. Section 2: Member management Employer guide 12

13 2.3 Annual Return Information.(Continued) You then need to press the Upload button, which will submit the file. You will be presented with an Upload Complete message, and the file will appear in the recently uploaded file area. Any errors produced from the submission of the Annual Return will be notified to you via , and an error file made available to download for your action. The error file will be located in the Download a file (STU) area, under the categories option error files. Identifying information Contains the surname, forenames and any previous surname(s) of the teacher, the teacher s reference number, National Insurance number and details of the appointment. LA and school The LA and school number will be included whenever there is a change to either number, or if there has been a break in the teacher s progression of service. Description of teacher (Salary scale) The teacher s payscale during the period of service. Full or part-time indicator (F/P) Indicates whether the line of service was full or part-time. A part-time teacher on a regular contract of employment will be shown with 7 and on an irregular contract as 8. This is shown in special classes (SC). Out of School Learning Activity Payments should be grossed up to an annual rate, included in the annual salary and shown in the other allowances field. A Residential Emolument which has been agreed by The Teachers Pension Scheme to be pensionable should be included in the annual salary and the amount shown in the other allowances field. The SEN allowance must be recorded in the supplement field and included in the full-time annual salary. The 1 or 2 notation for Social Priority remains unaltered. Retention and Recruitment allowance should be included in the annual salary and the amount should be shown in the supplement field. Recruitment and Retention (R&R) allowance should relate to a defined period of employment, which should not exceed three years. Payments for continuing professional development undertaken outside the school day and activities relating to the provision of initial teacher training should be included in the annual salary and shown in the other allowances field. Performance-Related pay should be included in the salary of the year in which it related and not the year it was paid. The value of the discretionary payments for Head Teachers should be included in the full-time annual salary and recorded in the supplement field. Under Teachers Pensions Regulations, overtime and bonuses are not pensionable. Start date Refers to the period of service described on the line of the record. The service recording year is 1 April to the following 31 March. Recording of Pensionable Allowances Outlined below are the additional pensionable payments and details of how they should be recorded: If you're an employer in Wales then the GTCW ( 33) should be included in the annual salary of the period in which it was paid. It should not be shown in the other allowances field. Section 2: Member management Employer guide 13

14 2.4 Annual Allowance Once we ve received your Annual Return, we ll assess the value of teacher pension savings over a period of time called the pension input period (PIP). This period usually covers 12 months but doesn't have to match the tax year, in the case of the Teachers Pension Scheme the PIP runs from 1 April to 31 March. The amount that a teacher s pension savings can benefit from tax relief is limited to an Annual Allowance, currently 50,000. From the tax year onwards the Annual Allowance will be reduce to 40,000. Therefore, teacher s pension savings in the tax year and onward will be tested against the 40,000 Annual Allowance. If a teacher saves more than this amount they may have to pay a tax charge on the excess. The amount of the pension savings that exceeds a teacher s Annual Allowance is added to any other taxable income they have for that tax year in assessing their tax liability. We ll provide teachers with a Pensions Saving Statement, where we consider that they re likely to incur a tax charge as a result of significant increases in their pension savings in the Scheme for that tax year. Significant increase in pension s savings can result from increases in salary or the lump sum purchase of additional benefits. Once the teacher has received a Pensions Saving Statement they can use this information to complete a self assessment tax return. Teachers who have incurred a tax charge may wish to seek independent financial advice. Section 2: Member management Employer guide 14

15 2.5 Reading a Service Record. Additions The five fields are relevant only to service in maintained establishments. Safeguarding ( SF ) SF Will be printed if the teacher s salary was safeguarded and the salary scale reflects the occupied post or the teacher is fast track. S will appear if the salary is safeguarded and the scale is that which was safeguarded. For service prior to 1 April 1985 where a salary was safeguarded and the teacher also received a social priority allowance, it will not be possible to highlight the salary as safeguarded. F will appear if the teacher is on a fast-track programme. London Allowance ( LA ) From 1 April 2003 the Inner London Allowance Indicator I will identify teachers being paid on the London scale. For service after 1 April 2004 the Outer London Allowance Indicator O and the Fringe Allowance Indicator F will continue to be used to show the appropriate London Scale. Special class ( SC ) From 1997 a code of 7 or 8 will appear in respect of part-time teachers. This indicates whether their contract of employment is regular or irregular. Other allowances (OTH ALLCS) Additional pensionable allowance paid which is included in the Annual Salary Rate will be detailed here. Service superannuable ( SCE SP ) One of the following codes will appear: RS Reckonable service NR Non-reckonable service IS Island service AD Admitted service OS Overseas service EX Excused contributions RP Contributions repaid to teacher TO Contributions transferred out. For Teachers Pension Scheme use only Indicates a section that should only be used for the Teachers Pension Scheme purposes. Services Codes ( SS ) 02 Part-time eligible, but not pensionable service 05 Pensionable service 08 Non-pensionable service, opted out 15 Non-pensionable, contributions repaid 35 Non-pensionable service, contributions repaid with payment in lieu (PIL) 45 Non-pensionable service, transferred out 00 Unconfirmed service. Suffix The suffix code of S or N denotes if the member s service is in the 80th or 60th accrual Scheme. Section 2: Member management Employer guide 15

16 2.6 Opt-outs. What you should do 1 Tell them to think very carefully about any decision to opt out. Urge them to compare and contrast the benefits of their current scheme with any alternative arrangements. Advise them to consult an Independent Financial Advisor or their Teachers Association first. 2 If a teacher still wishes to opt out of the scheme they can do so at any time. 3 Tell them that they have to make their own opting out election, which can be completed using My Pension Online at within the secure member area of the website. How an opt-out works An election to opt out of the scheme works like this: Election made: Within three months after the start of pensionable employment or Auto Enrolment. Election date: The first day of pensionable employment or Auto Enrolment. Election made: More than three months after the start of pensionable employment or Auto Enrolment. Election date: The first day of the month after the election is signed. Any deviation in these effective dates must not be applied unless approved by the Teachers Pension Scheme. Pension contributions should stop from the effective date. We will notify acceptance to the teacher and make sure you are aware of their election to opt out. Effective dates for opt-out elections cannot be retrospective, so any failure to deduct contributions will generate an interest charge for both you and the teacher. 2.7 Re-joining after previously opting out. A teacher who has previously opted out can elect to rejoin. A letter will be sent to the teacher to confirm acceptance and asking them to ensure the employer is aware of the election. What you should do with members who are rejoining 1 Pension contributions should be deducted from the effective date. 2 It s a good idea to take a copy of the member s election before sending it to the Teachers Pension Scheme. 3 See below which one of the three scenarios applies. Note that excluded employment is employment which would, but for the election to opt out, have been pensionable employment. Election made: Whilst not in, but in expectation of entering, excluded employment. Election date: The day before entering excluded employment. Election made: Within three months after the start of any period of excluded employment Election date: The first day of excluded employment. Election made: More than three months after the start of any period of excluded employment Election date: The first day of the month following that in which the MEMELECT form was signed by the teacher. Section 2: Member management Employer guide 16

17 2.8 Absences from teaching. Sick leave Sick leave is pensionable, provided the teacher is receiving at least half pay. What you do if one of your teachers is off sick 1 You ll need to record it as if the teacher is still working at their pre-sickness levels. But remember, sick leave is not pensionable if they re receiving less than half pay. 2 Deduct employer and employee contributions from the actual amount paid. Record any unpaid leave as days excluded on the Annual Return. 3 For irregular part-time teachers, you will need to determine the amount of part-time salary to be recorded on the Annual Return for the period of sickness absence, as well as the full-time equivalent salary. 4 Before any ill-health retirement application is made you must consider if any workplace adjustment can be made to help the teacher return to work. What you do with teachers who have left pensionable employment 1 If a teacher resigns form TR8 should be completed. They are classed as in pensionable employment up to the last day of his or her contract. You must issue or direct the member to our Leaving Pensionable Employment leaflet before they laeave service, available via our website. Maternity, Paternity, Parental and Adoption leave ( Family leave ) Where a teacher is absent due to Family leave, you should treat it as pensionable employment as long as the teacher is receiving at least half pay or is being paid statutory Family leave. What you should do in cases of Family leave that result in a return to work 1 If a teacher takes Family leave (on at least half pay) and then returns to teaching, you must class that period of Family leave as pensionable employment. 2 You should make sure both employer and teacher contributions are paid for as long as the teacher receives at least half pay or statutory Family leave pay. 3 You must record the service on the Annual Return as if they are still on their pre-family leave salary until that the teacher ceases to receive at least half pay or statutory pay. 4 When the teacher is no longer in receipt of at least half pay or statutory pay, you must record it on the Annual Return as days excluded until they return to pensionable employment. What you should do if they decide not to return or pay ceases Sometimes a teacher does not return to duty after Family leave. Or statutory Family leave ceases. Or the teacher s salary reduces to less than half pay and no statutory Family leave is payable. If any of these apply, you should do this: 1 Complete form TR8. That s because pensionable employment will be considered to have ended. 2 Where a teacher receives less than half pay and no statutory Family leave, you must show that period on the Annual Return as days excluded. 3 They can be considered for the two-tier in-service ill health benefit as long as they remain in a contractual relationship with you. A member who has left employment is covered for an in service death grant for 12 months after leaving, provided the reason for leaving was ill-health and they haven't claimed ill-health retirement benefits. Section 2: Member management Employer guide 17

18 2.8 Absences from teaching. (Continued) Industrial action/strike days Absence due to industrial action cannot be classed as reckonable service and must be shown on all service returns as days excluded. What you do if a teacher is on strike 1 Record the strike days as days excluded on the teacher s Annual Return service record. Strike days will not be used in any calculation for pension purposes. 2 For part-time teachers, you must record the actual part-time salary paid and the full-time equivalent but record the strike day alongside any other days not worked. 3 If you have a teacher over Normal Pension Age who is on strike, they will not become entitled to retirement benefits while they're on strike, provided you record the service as days excluded rather than a service break. 4 Inform teachers who wish to buy back strike days that this is not allowed by the scheme. Finally, if any of your teachers die while on strike, they remain covered for the in-service death grant. Other absences All absences where a teacher is entitled to be paid a salary are pensionable. Unpaid absences, such as sabbaticals, are not pensionable. What you do about absences 1 Determine whether a leaver notification is required or the absence is treated as days excluded. 2 If an incapacitated teacher remains under a contract of employment having ceased to be in pensionable employment, they will still be considered for two-tier health benefits if they apply while in an employee/employer relationship; or within six months of leaving pensionable employment if later. 3 You should also make the teacher aware that they will only be covered for the in-service death grant for 12 months after leaving pensionable employment or until retirement benefits become payable. Pensionable employment ceases when a member is receiving less than half pay when absence is due to ill health. Suspension from duty If a teacher is suspended on full pay, it s pensionable and you must record it as such. If they re suspended without pay, it s not classed as pensionable employment and any periods without pay must be shown as days excluded. If a teacher applies for retirement benefits while suspended from duty, it is important that you make us aware of this as it may impact on the teacher s retirement application. Section 2: Member management Employer guide 18

19 2.9 Leavers. (A teacher leaving current employment) What you do when a teacher leaves First, define who s a Leaver. 1 They re someone who is no longer in pensionable employment. 2 They re NOT someone who: Changes from full-time to part-time employment. Moves between establishments within the same employer. Retires. Dies in service. Opts out of the scheme. 3 Where a teacher does not return to duty after maternity, paternity, parental or adoption leave, their pensionable employment will be considered to have stopped at the end of the paid leave. 4 You must give the teacher a copy of or direct them to the Leaving Pensionable Employment leaflet available on our website. See Section 2.6: Opt-outs. You should stress with the teacher the importance of keeping us informed of any address or name changes. This can be completed via My Pension Online by the member. How you manage a teacher leaving Notify us immediately completing the Employer Portal TR8 template. Download To download a TR8, click on STU Download on the left-hand side. Click on the appropriate document that you wish to download. Then click on Save when the message box appears this will save the document to your computer take note of where you specify to save the document (e.g. My Documents). Note: if you do not get the option to select save, right click the document file name on the Employer Portal and select Save Target As this will then display a save dialogue box. Once this appears save the file to the desired location. You must only use the templates currently held on the Employer Portal to send information to us. These files must be saved in a CSV format. If files are uploaded in an incorrect format, they cannot be processed automatically and will be returned to you to resubmit. Upload To upload a completed TR8, click on STU Upload. Input a description for the file to be uploaded then click on browse to search for the desired file. Note: if you are uploading a TR8, the file name must start with TR8, and not contain commas or brackets. Please do not change this file name. Section 2: Member management Employer guide 19

20 2.10 Member divorce or dissolution. As part of a divorce settlement (or a settlement resulting from the dissolving of a civil partnership), the law allows the current value of a teacher s pension benefits to be shared. The first stage towards Pension Sharing is that we are asked to provide a Cash Equivalent Transfer Value (CETV) and this has to be up to date. However, as we are not the employer, you are the one with the fully up-to-date service and salary details. That s why teachers are told to contact you to obtain their current details. What you should do when information is requested 1 If asked, you have to assist with this process. 2 You must return the completed form to the teacher, who will send it to us as part of their request for a CETV. 3 If the case proceeds to Pension Sharing, you ll get a further request for up-to-date service and salary details which you have to assist with. Premature Retirement Compensation (PRC) Pension Sharing does not apply to mandatory compensation or discretionary enhancement. Retirement Benefits You should be aware that if you obtain their benefit details from us that they won t show a reduction in service if a teacher is subject to Pension Sharing. Instead the benefits, when they come into payment, are reduced. How reduced retirement benefits are calculated 1 Calculate the benefits as normal, i.e. as if no Pension Sharing has occurred. 2 The basic amount of reduction in the benefits, which was calculated at the time of Pension Sharing and index link them up to the date of retirement. 3 2 is deducted from 1 to produce the reduced amounts payable. The benefits reduced are the pension and lump sum. Short-term pensions, where the member dies in service, are unaffected. Section 2: Member management Employer guide 20

21 2.11 Types of retirement. (Other than ill health) Managing your teachers retirement to everyone s satisfaction A big part of your role is making sure a teacher s retirement is handled efficiently and they receive their benefits on time. To do this you ll need to work closely with both the Teachers Pension Scheme and the teacher who s retiring. Another important part of your job is to recognise the mutual opportunities that potentially exist when a teacher retires. For instance, talking through a teacher s phased retirement options could result in an experienced member of staff working for longer with obvious benefits for resource planning. The first three things a retiring teacher needs to know: Tell them that a real-time estimate of their personal pension and state benefits is available on the Teachers Pension Scheme website in the secure area My Pension Online Point out that a number of retirement application forms are also there Finally, be sure that they re aware of the Planning for Retirement section of the website. Types of Retirement There are four retirement options open to teachers in good health. Full details of each are available in the Member Guide but here is an overview for now. Age retirement The Normal Pension Age for a teacher largely depends on whether they joined the scheme before 1 January If they did, their NPA is 60. If they joined on or after 1 January 2007 their NPA is 65. Special arrangements may apply to teachers who have transferred from teaching in Scotland or Northern Ireland. What you should know about age retirement benefits 1 Before they can be paid, the teacher must stop all teaching employment and their contract(s) of employment must end. 2 You and your teachers should be aware that once they stop teaching at any time after NPA or enter excluded employment they immediately become entitled to their retirement benefits even though they can t be paid until a written application is made. You should therefore encourage teachers to claim their benefits promptly to avoid the unnecessary accrual of pension arrears. 3 If the teacher subsequently takes up a new contract of employment after the cessation of all previous pensionable employment and has at least a day s break between the two jobs, their age benefits will be payable from the day after the previous employment ceased. The later period of employment will be treated as re-employment after retirement, which may be subject to abatement. In the case of supply teachers their contract must have ended, a non-working day will not be considered as a break in service. Urge your teachers to check out our Re-employment Calculators online at Or try them out for yourself. Section 2: Member management Employer guide 21

22 2.11 Types of retirement. (Other than ill health) (Continued) Actuarially adjusted benefits retirement (AAB) If a teacher is 55 or over, with pensionable or excluded employment on or after 30 March 2000, they can ask to access their retirement benefits before their NPA. The benefits will be actuarially adjusted permanently, although the pension will attract index linking. AAB cannot be awarded if the benefits are less than their guaranteed minimum pension. Any family benefits payable after the teacher dies will not be adjusted. What you should know if they ask for AAB retirement 1 If the teacher is in pensionable or excluded employment at the time the application is made, they must obtain your consent. 2 However, you cannot withhold consent for more than six months from the date on which permission is requested. 3 Before AAB retirement benefits can be paid the teacher must cease all teaching employment and their contract(s) of employment must end. 4 In the case of supply teachers, their contract must have ended. A non-working day will not be considered as a break in service. 5 If a teacher submits an application having left teaching but then returns to teaching service before the nominated payable date then the application is void. 6 Finally, there is an AAB retirement calculator on our website which you and the teacher can use to calculate their AAB. Phased retirement Your teachers may want to continue working while drawing some of their accrued pension benefits. In this case, phased retirement is a practical option, as long as some simple guidelines are followed. What you should know if a teacher requests phased retirement 1 The teacher s pensionable salary must reduce by at least 20% for a minimum of 12 months following the date of retirement. For example, this could be because their hours have been adjusted, or they ve taken up a post of lesser responsibility. 2 The teacher may take phased retirement if they start a new appointment in a support role in an educational establishment, such as a classroom assistant. The new appointment can be with a different employer but must be within six months of the previous job ceasing. 3 The application form for phased retirement must be signed by the employer responsible for the new working arrangement and must be made within three months of the teacher taking up employment. 4 The teacher can only take a maximum of two phased retirements. Section 2: Member management Employer guide 22

23 2.11 Types of retirement. (Other than ill health) (Continued) Premature retirement It is your choice whether or not to award teachers aged over 55 whose employment has terminated on the grounds of redundancy or organisational efficiency unreduced premature retirement benefits. What you should know before you award premature retirement 1 Premature retirement is not an option at the end of a fixed-term contract. 2 The teacher must stop all teaching work before premature retirement benefits can be paid and their contract(s) of employment must end. If they re supply teachers, their contract must have ended. (Remember, a non-working day is not a break in service.) 3 If a severance payment is made by you, the premature benefits cannot be paid if you are a local authority. There are two types of compensation that you will be responsible for: Mandatory compensation You are legally obliged to pay mandatory compensation (Part IV of the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997). The Teachers Pension Scheme will pay an Actuarially adjusted pension and lump sum based upon the teacher s pensionable service and you pay the difference so that the scheme teacher receives unreduced benefits for their lifetime. Any family benefits that come into payment at a later date are paid by the Teachers Pension Scheme and are not reduced. You can estimate the costs of mandatory compensation payable by accessing the AAB/Retirement Calculator on the Teachers Pension Scheme website. Discretionary compensation* You have discretionary power under Part V of the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997 to pay discretionary compensation by way of additional pension and lump sum. You will be responsible for any family benefits in respect of these discretionary compensation payments. The decision to increase the teacher s benefits in this way, and by how much, is entirely at your discretion but is subject to certain limits. There are no costs to the Teachers Pension Scheme in relation to discretionary compensation payments. * This is not applicable to HE institutions, accepted schools and certain other employers. This information is for guidance only as the discretionary provision does not fall within the Teachers Pension Scheme s remit. As such any further information or clarification should be directed to the Department for Education: Contact Robert Elliot on or robert.elliot@education.gsi.gov.uk Section 2: Member management Employer guide 23