Your guide to teachers pensions

Your guide to teachers pensions Employer guide

Contents 1. We need you... 3 1.1 To spread the word...4 1.2 To keep them up to speed....4 1.3 To fulfil statutory requirements.... 5 1.4 To decide who s a scheme member... 5 1.5 To tell who isn t a scheme member... 7 1.6 To help keep our records up to date... 7 1.7 To keep in touch with us...8 2. Mem ber management... 9 2.1 New appointments... 10 2.2 Auto Enrolment...11 2.3 Annual Return Information...12 2.4 Annual Allowance... 14 2.5 Reading a Service Record... 15 2.6 Opt-outs... 16 2.7 Re-joining after previously opting out... 16 2.8 Absences from teaching...17 2.9 Leavers...19 2.10 Member divorce or dissolution...20 2.11 Types of retirement (other than ill health)...21 2.12 Retired teachers and re-employment...30 2.13 Death of a member in service...32 3. Scheme administration...34 3.1 Updates to member details...35 3.2 Managing contributions...35 3.3 Providing service, salary and additional contributions information... 38 3.4 Providing service and salary information... 38 3.5 Contributions... 39 3.6 Providing service and salary information... 40 3.7 End of Year Certificate (EOYC)... 41 3.8 Audit Certification... 44 3.9 National Insurance... 47 Section 1: We need you... Employer guide 2

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

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 email 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

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 2006. 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 2007. 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 2007. 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

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

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 1977. 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 1962. 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

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 emailing 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 email address for web form notifications to be issued provides a central contact point. If you want to work this way please confirm the global email address to tpstu@teacherspensions.co.uk. It has several advantages over an individual email 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. 2 1-2-1 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: www.teacherspensions.co.uk. Alternatively, call the Employer Helpline on 08453 003 756. 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

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

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 www.teacherspensions.co.uk. 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 www.teacherspensions.co.uk. 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

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

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

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 email, 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

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 2014-15 onwards the Annual Allowance will be reduce to 40,000. Therefore, teacher s pension savings in the tax year 2014-15 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

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

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 www.teacherspensions.co.uk 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

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

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

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

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

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 www.teacherspensions.co.uk. Point out that a number of retirement application forms are also there www.teacherspensions.co.uk. 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 2007. 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 www.teacherspensions.co.uk. Or try them out for yourself. Section 2: Member management Employer guide 21

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

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 01325 735 588 or email robert.elliot@education.gsi.gov.uk Section 2: Member management Employer guide 23

2.11 Types of retirement. (Other than ill health) (Continued) Retirement Applications 1 You ll find all the retirement application forms on the secure area of the website My Pension Online www.teacherspensions.co.uk. They can be completed electronically. 2 When completing the Employer s section of the form, you should provide details of the last two years service and salary. The information must be split at 31 March for each year. 3 If the final salary rate is not known don t leave it blank. The current salary should be entered and this should include any GTCW payment. It is essential that you complete this correctly or the teacher will either be underpaid or overpaid benefits. If benefits are overpaid they must be recovered. The teacher will be told of the reason for the change in their level of benefits, i.e. that you supplied incorrect information. 4 The salaries entered on the retirement form should be the same as those that you will be entering on the Annual Service and Salary return. 5 Application forms should be submitted approximately four months in advance of the retirement date. This enables us to conclude any issues affecting retirement and undertake processing to ensure payments are made on the correct date. Multiple Employment Before we can pay retirement benefits, all pensionable or excluded employment must be terminated if the teacher is in pensionable or excluded employment with more than one employer. There are exceptions. Age retirement, where the teacher has opted out of the Teachers Pension Scheme and phased retirement, where employment may continue. If the teacher is continuing in pensionable or excluded employment with more than one employer, the form must be completed by the main employer, who must certify that the teacher s salary from all employments will reduce by 20% of their salary in the six months prior to phased retirement. If the main employer does not certify the reduction, the application is invalid. The teacher is required to supply details of their other employers on their application form, along with details of their period of employment with each employer Completion by the Employer You must complete the section of the form relating to service and salary details and then forward it to us. For Premature Retirement If you re asked to approve premature retirement, it s important you tell us why the employment is terminating by completing the declaration. If a teacher has more than one employer all the employers must agree to premature retirement being granted. Severance Payment If an enhanced severance payment is, or will be, paid to the teacher because of redundancy or in the interest of the efficient discharge of employer s function, premature retirement benefits cannot be awarded. Mandatory Compensation has to be confirmed on the form and where there is more than one employer that they're all in agreement to pay the mandatory compensation. What s more, we need you to tell us whether you want us to administer it on your behalf. The application won t be processed without this information. Section 2: Member management Employer guide 24

2.11 Types of retirement. (Other than ill health) (Continued) Calculating Retirement Benefits The way retirement benefits are calculated is set out below. Remember, if a teacher takes AAB retirement their benefits will be reduced throughout their lifetime. For teachers with service both before and after 1 January 2007 Pension: 1/80 of average salary for each year of reckonable service. Lump Sum: 3/80 of average salary for each year of reckonable service. This is how the calculations look using real figures. Service: (30 years x Salary: 30,000)/80 = Pension: 11,250 Lump sum: 3 x 11,250 = 33,750 There is also the option to convert part of their pension to increase their lump sum. For teachers who only have service on or after 1 January 2007 Pension: Pension is 1/60 of average salary for each year of reckonable service. Lump Sum: They don t get an automatic lump sum. However, there is the option to take a retirement lump sum, up to 25% of fund value, by surrendering 1 of pension for 12 of lump sum. And here s how the numbers look for teachers with service on or after 1 January 2007. Service: (30 years x Salary: 30,000)/60 = Pension: 15,000 For you and your teachers to do some sums of your own, don t forget out pension calculators. You ll find them at www.teacherspensions.co.uk. Reckonable service is the number of years and days the member has been in the Teachers Pension Scheme (in other words, in pensionable employment). It also includes any other service they may be entitled to take into account. This could be service they ve transferred from another pension scheme. Defining average salary Average salary is important because it s used to calculate final pensions. It s defined as whichever is the higher of these: The pensionable salary the teacher received in the last 12 months before retirement. The average of the best consecutive three years during their last 10 years of service, index-linked to current day values. Restrictions Some members who joined the scheme between 1 June 1989 and 1 April 2008 may be affected by an earnings cap. Some may have elected to have this earnings cap lifted and previous capped service reduced. However, from 1 April 2008, any member whose salary was below the earnings cap, or any new entrant, will have employee and employer contributions deducted based on full salary. If the pensionable salary received in the last 12 months before retirement gives the higher average salary figure, and any salary (or salaries) in the final three years of pensionable employment was increased by more than 5,200 or 10%, the increase in that salary or salaries will be restricted to 5,200 or 10%, whichever is the greater. This figure is reviewed each year and the latest figure can be found on our website. Where this restriction applies, contributions in respect of any salary not used in the calculation of average salary will be refunded after retirement. Only at retirement do we determine which average salary calculation is the better of the two. Under no circumstances will we undertake calculations of estimates on behalf of employers on the basis of potential or hypothetical salary figures. You may purchase additional pension for the teacher by a one-off payment. But only within six months of the teacher leaving pensionable employment. Section 2: Member management Employer guide 25

2.11 Types of retirement. (Other than ill health) (Continued) How to calculate the value of Mandatory Compensation Start by entering the appropriate details for the scheme member in the AAB/Premature Retirement Calculator on our website. In the example below the member is male, aged 56 years and 2 months. His accrued pensionable service is 34 years and 204 days and his final salary is 41,000 p.a. Age input to calculator: 56 years, 2 months Service used in calculation: 34 years, 204 days Salary used in calculation: 41,000 A Your Actuarially adjusted pension: Basic Pension 14,523 B Your Actuarially Reduced Lump Sum: Basic LS 43,569 Converted: Residual Pension 11,670 Converted: Maximum Lump Sum 77,801 Factor used from Table 2: 0.82 C Unreduced Pension for comparison: Basic Pension * 17,711 D Unreduced Lump Sum for comparison: Basic LS * 53,133 * The converted figures would be based on the Teachers Pension Scheme share only, i.e. amounts shown above. (Figures rounded down to nearest ) The Teachers Pension Scheme will pay the reduced values, A ( 14,523) and B ( 43,569). This means you, the employer, would pay an annual pension of C minus A and a one-off lump sum of D minus B. In this example these would be 3,188 and 9,564 respectively. As well as paying the mandatory values above, employers may be able to pay additional discretionary compensation, as previously explained. Option to convert annual pension for a lump sum or increased retirement lump sum For those members with pensionable service on or after 1 January 2007, members have an option to convert pension into a retirement lump sum up to the maximum allowed by HM Revenue and Customs, which is 25% of the value of the member's pension. The calculation will differ depending on whether the member has a NPA of 60 or 65. To calculate the maximum retirement lump sum and the consequent reduction in the member's annual pension visit the calculator on our website at www.teacherspensions.co.uk. Any decision to take the maximum lump sum will not affect the dependant's pension payable in the event of the member's death. Section 2: Member management Employer guide 26

2.11 Types of retirement. (Other than ill health) (Continued) Calculating the difference between pension and lump sum By using the AAB/Premature Retirement Calculator you can work out the difference between the reduced and unreduced amounts of pension and lump sum. Here s how you do it: First calculate the difference between the reduced and unreduced amounts of pension and lump sum and make a note of these two figures (e.g. Please see previous page C minus A = pension and D minus B = lump sum). View the PRC Actuarial tables www.teacherspensions.co.uk. Now refer back to your notes and multiply the pension difference (previously obtained from the AAB calculator) by the appropriate factor obtainable from the table. This will calculate the cost for the pension to be paid over the teacher s lifetime. As the lump sum is a one-off payment, simply add on the lump sum difference and this will provide the capitalised cost for you. Payment of Mandatory and Discretionary Compensation You can make your own arrangements for paying elements of the lump sum and pension to your teacher. Alternatively, the Teachers Pension Scheme can provide a service to administer these payments on your behalf. There is a fee for this service. Section 2: Member management Employer guide 27

2.11 Types of retirement. (Other than ill health) (Continued) Ill health retirement What to do if a teacher s employment is affected by ill health Teachers who are ill may have to stop working before their retirement age (i.e. 60 or 65). However, it is the joint responsibility of you and your occupational health advisors to explore ways of helping them to stay in, or return to, work perhaps through redeployment, part-time working, or other workplace adjustments. If these measures fail then ill health retirement may be appropriate. These are the next steps: 1 If a teacher is under normal retirement age and applies for ill health benefits, both the application form and medical evidence form should be completed and returned to us. 2 Make sure the declaration on the application form has been signed and dated by the applicant and that you ve completed the certification. Otherwise the application will be invalid. 3 Applications and supporting medical evidence will be considered by Medical Advisors appointed by the Secretary of State and the final decision will be made by Teachers Pensions. There are two different levels of Ill health benefits that can be awarded: Accrued Benefits These are awarded if the teacher is assessed as being permanently unable to teach but can do other work. With Accrued Benefits a teacher s service won t be enhanced. Enhanced Benefits These are awarded if the teacher is assessed as being unable to undertake any type of gainful employment. Their service will be enhanced. A teacher must apply for ill-health retirement within six months of leaving pensionable employment to be eligible for enhancement. If they ve been on a period of sick leave, maternity, paternity, parental or adoption leave, or a career break which immediately followed a period of pensionable employment, the application must be made before the sick leave or period of absence ends. If the teacher doesn t apply for ill health benefits within these timescales, an application for ill health benefits can still be made, but the deferred teacher has to meet the enhanced criteria of not being able to undertake any gainful employment. In this case, the service used will not be enhanced (i.e. Accrued Benefits will be paid). Teachers who are barred Teachers who are barred for misconduct or are under investigation by the DfE with a view to barring may not be awarded benefits. However, if after an investigation they are not barred, then an application will be considered. Other criteria to consider The teacher must not have applied for phased retirement, premature retirement or Actuarially adjusted benefits in respect of the same period of employment. However, if any of these have been awarded in respect of an earlier period of service, and a teacher who has subsequently taken up further pensionable teaching employment later suffers a breakdown in health, the teacher can apply for ill health benefits for the later period of service. In all circumstances the teacher must have completed the appropriate retirement qualification periods. Section 2: Member management Employer guide 28

2.11 Types of retirement. (Other than ill health) (Continued) Notification Both you and your teacher will be told in writing whether or not an application is accepted. There are two ways to deal with this: If the application has been accepted, and the teacher is still actively teaching you must arrange for this to cease immediately. You must provide us with details of the teacher s pensionable service and salary from the date of your last Annual Return to the last day of pensionable service. If the application has been rejected, the teacher has the right to appeal and should follow the appeal process. Details of this will be sent to the teacher with the rejection letter. Other information Life Commutation If a teacher is terminally ill they may request that the retirement pension be converted to a lump sum payment. This is equal to five times the annual pension. Where an application is received and there is confirmation that a teacher has a life expectancy of less than a year, the case does not go to the medical advisor. Short service serious ill health grant A short service serious ill health grant may be payable where a teacher under 75 (but with insufficient service to qualify for ill health benefits) has to stop teaching because they have a life expectancy of less than 12 months. As with an ill health application, both forms must be completed and the application won t be processed until both are received. The occupational health advisor must be satisfied that the medical evidence is sufficient to support the ill health application. How to deal with applications for ill health benefits 1 The teacher has to submit the application to you first. Only after you ve certified it should you send the application plus the medical evidence to us. The occupational health advisor must be satisfied that the medical evidence is sufficient to support the ill health application. 2 The only exception to this is where the teacher left you more than 12 months ago, in which case, the teacher should send the documents directly to us themselves. Medical evidence form Where the medical evidence form has been completed by a specialist or a GP, it should be sent to your Occupational Health Advisor, along with any supporting documents. They will then assess it before it is forwarded to us. We cannot obtain any medical reports on the applicant s behalf. If the Occupational Health Advisor thinks the application doesn t contain enough medical information to enable Teachers Pensions to make a recommendation, the applicant must be given the opportunity to consider what more could be provided. Importance of specialists When a psychiatric or physical condition is severe enough to warrant ill health retirement, it s reasonable to expect that the applicant will have been assessed by a specialist. It will greatly help in the consideration of the medical information if this is the case and supporting evidence is provided by the specialist. If it s not possible, or the applicant has not been referred to a specialist, then the form should be completed by the applicant s GP or your occupational health physician. Copies of all specialist reports or hospital correspondence must be included because all applications for ill health retirement will be considered on the basis of the medical information submitted with the application. Section 2: Member management Employer guide 29

2.12 Retired teachers and re-employment. There s nothing in the Teachers Pensions Regulations to prevent a retired teacher from becoming re-employed. You should always ask a prospective teacher if they're in receipt of any type of retirement benefits as taking up employment could affect their pension. What you must do if you re-employ a retired teacher 1 Notify us of the appointment immediately by completing a TR6 on the Employer Portal. 2 Make sure that the employee notifies us using the Certificate of Re-employment form. That way, we can assess the impact the employment will have on their pension benefits. They need to know that if they don t inform us immediately, they may have to pay back substantial amounts of pension. A Certificate of Re-employment must also be completed at the start of each financial year. 3 Be aware that their service is automatically pensionable and contributions must be deducted. The only exceptions are if the member opts out of the scheme or is aged over 75. Re-employment after ill health retirement Where a teacher has been accepted as unfit for teaching but subsequently returns to teaching for even one day after the award of ill health benefits pension payments, those payments must stop immediately. That s why you must be totally satisfied that a person who has retired for reasons of ill health is medically fit to resume teaching. pension being affected are those who retired on ill health grounds before 1 April 1997. These people can't be auto enrolled into the Teachers' Pension Scheme and their pensions must be stopped immediately if they' re re-employed more than 2.5 days a week. 5 If there s evidence that the teacher s health has been restored, their pension may stop irrespective of whether the teacher is working less than 2.5 days a week. 6 Even if a re-employed teacher opts out of the scheme, the above will still apply. Re-employment abatement When a teacher takes up further teaching employment after retirement, this will automatically be pensionable and contributions should be deducted unless the teacher opts out of the Teachers Pension Scheme. This also applies if a retired teacher who is already in teaching employment takes up a new contract, any future service will be pensionable unless they opt out. If a teacher s last retirement was phased or AAB retirement then their pension will not be affected. If they retired on age or premature grounds their pension may be reduced or stopped. If they retired on ill health grounds their pension will cease. They must complete a Certificate of Re-employment in all cases. What you must do when employing a teacher returning after ill health Retirement 1 You must be satisfied of a teacher s medical fitness to teach. 2 You must advise us as soon as the teacher returns to employment by completing a TR6 using the Employer Portal. 3 You must advise a teacher who retired on health grounds that their re-employment comes within the scope of the Teachers Pensions Regulations. 4 You should know that the only teachers who may undertake employment on a limited part-time basis without their entitlement to the ill health Section 2: Member management Employer guide 30

2.12 Retired teachers and re-employment. (Continued) The calculation The teacher s pension will be stopped if, in any tax year, their annual pension, plus their earnings, exceeds the highest salary in their average salary period ( salary of reference ) plus pensions increase. Things to remember: Any compensation payment being made by their employer prior to retirement is included in the abatement calculation and it is also affected. Their pension will stop during the tax year from the point where earnings plus pension equal the salary of reference, but it will recommence at the start of the following tax year. The salary of reference and the annual pension for those over age 55 is reviewed in line with the cost of living each April. Additional Benefits after Retirement A teacher who's working after retirement doesn't have to apply for their additional benefits each time they cease employment. If a teacher is unsure if they intend to undertake further employment at a later date, you should make them aware that the scheme allows continuous aggregations. This means that all periods of pensionable service are added together when assessing if a member is entitled to benefits. In the case of a retired member only re-employment service will be aggregated. If a teacher has been re-employed for 365 days or more and ceases employment are entitled to an additional pension based on this additional service. They should complete an application form as covered in the retirement section of this guide. If the teacher has less than 365 days service and doesn't intend to do any further teaching they can apply for an annuity payment. They can't receive a repayment of their contributions. Section 2: Member management Employer guide 31

2.13 Death of a member in service. When a teacher dies in service, you must do two things: 1 Get in touch by email or phone and let us know the teacher s name, reference number, date of death and the name and address of the next of kin. 2 Put into payment any short-term pension after verifying with us that the beneficiary has an entitlement to receive a pension. The application form for death benefits should be completed by the next of kin and can be found on our website www.teacherspensions.co.uk. Short-term pensions If one of your teachers dies while employed, their surviving beneficiaries may be entitled to a shortterm pension. A short-term pension begins on the day following the teacher s death and is payable at the rate of the teacher s salary at the time of death. Should a retrospective increase in salary become due the short-term pension should be adjusted. In effect, the short-term pension is a continuation of the teacher s salary. What to remember 1 Before a short-term pension can be paid, you have to check the status of any adult beneficiaries (other than a surviving spouse or registered civil partner) with us. They can include a nominated partner, or nominated adult dependant. They can also include the child or children of a member. A full definition of who is classed as a child in pension terms can be found on our website www.teacherspensions.co.uk. 2 In the case of a surviving spouse or registered civil partner, you should ask to see an original copy of the marriage or registration certificate before confirming with Teachers Pensions that benefits can be paid. 3 If the teacher has no spouse, registered civil partner, nominated partner, nominated adult dependant or children, a short-term pension is not paid. How short-term pension payment arrangements work This pension is paid for a period of three or six months at the rate of the teacher s final salary less any deductions in respect of income tax. National Insurance contributions should not be deducted from short-term pension payments. The payment arrangements are shown in the table below. You should reclaim the payment from your monthly contribution payment and include that information on the payment slip. Spouse or registered civil partner or adult nominated dependant or partner: Three months @ member s monthly salary less any income tax. Spouse or registered civil partner or adult nominated dependant and children or partner: Three months @ teacher s monthly salary paid to the adult beneficiary less any income tax. Three months @ teacher s monthly salary paid to child(ren) (the same amount is payable regardless of the number of children). Child(ren) only: Six months @ teacher s monthly salary (the same amount is payable regardless of the number of children). Section 2: Member management Employer guide 32

2.13 Death of a member in service. (Continued) An example Teacher s final salary = 36,000.00 Monthly gross salary = 3,000.00 Gross short-term pension payable is 3,000 a month for spouse or registered civil partner or adult nominated dependant for three months. Tax should be deducted in line with HMRC rules. 3,000 a month for child(ren) for three months. If no surviving spouse, registered civil partner or nominated partner: 3,000 a month for child(ren) for six months. If the teacher was employed on a regular part-time contract at the time of death, the short-term pension will be based on the same percentage of the full-time contract. Others who are entitled to short-term pensions Teachers who stopped teaching on grounds of ill health but are not in receipt of retirement benefits from the Teachers Pension Scheme and die within 12 months of their last day of teaching service are also entitled to a short-term pension. We pay this. How to recover the value of a short-term pension You should recover the value of the short-term pension paid to the beneficiaries by deducting that sum from your next monthly submission of pension contributions. You ll need to record this on the payment form that you submit via the Employer Portal. Short-term pensions paid to adults are subject to PAYE income tax deductions. Any queries about tax should be directed to your local tax office. If the teacher was not employed on a regular part-time contract, the short-term pension will be paid at the full-time rate. Section 2: Member management Employer guide 33

3. Scheme administration This section deals with the nuts and bolts of the scheme. How you administer it day to day. That means everything from deducting contributions, to handling Audit Certification and National Insurance. Let s make a start with the members themselves. Section 3: Scheme administration Employer guide 34

3.1 Updates to member details. Amendments to teacher records Accurate record keeping is the most fundamental administrative task within the scheme. So by using member search on the Employer Portal you ll find it easy to handle the following: Change of name. Verify date of birth. Amend NI number. Change marital status. Retrospective service and salary amendments Occasionally you may find that inaccurate service details have been given on previous Annual Returns, or a retrospective pay award has been made to a teacher after you ve submitted service and salary details on the Annual Return. If this is the case, you should amend both using the Employer Portal TR28 template. 3.2 Managing contributions. Deduction of contributions All teachers who are members of the scheme must have their pension contributions deducted from their gross contributable salaries. The person responsible for deducting the correct amount is you. If you don t do it properly, you ll then need to recover any arrears due from the teacher. Here are some basic things to remember: 1 All employer and employee contributions must be remitted to the Teachers Pension Scheme by the seventh of the month following their deduction. 2 Where the seventh falls on either a weekend or bank holiday, the contributions must be received by the last working day before it. 3 Interest will be charged on late payments. What s more, where incorrect deductions or payments of contributions are made, employers will be liable to pay arrears and interest. 4 Where a teacher has elected to pay additional contributions over and above their basic contributions, they should produce a letter from the Teachers Pension Scheme that explains the rate of deduction and the period over which it applies. 5 Finally, you must complete a payment slip on the Employer Portal giving the breakdown of the contributions you are paying. Additional pension contributions If a member wants to increase their pension benefits, they can buy additional pension as long as they are in pensionable employment and under 65. Additional pension can be bought in multiples of 250 up to a maximum of 5,900. This amount is reviewed each year and you and the teacher will be notified of any changes. Payment can be made by a lump sum or a regular monthly payment deducted from a member s salary. Monthly deductions should be recorded in Line I of the contributions monthly slip. Section 3: Scheme administration Employer guide 35

3.2 Managing contributions. (Continued) Past Added Years (PAY) The PAY arrangements are no longer available but existing arrangements are being honoured. These contributions must be noted separately from other contributions on the remittance slip in line G. Where a teacher is buying additional years of service by instalments (set % deduction of salary) additional contributions must not be deducted from the salary if there has been a break in pensionable employment of more than 30 days. Employers should also notify us when a teacher has had a gap of more than 30 days so that the record can be updated accordingly. Care should also be taken that contributions are not deducted beyond the end date of the election. The teacher should be able to provide the date the arrangement ends but in cases of doubt, the Teachers Pension Scheme must be consulted. Contributions on a former higher salary This provision is no longer available but existing arrangements are being honoured. Contributions in respect of these elections are classed as additional contributions (not Additional Pension) and should be deducted from the teacher s notional salary and submitted with the monthly remittance of all other contributions to the Teachers Pension Scheme. The contributions should be recorded with other extra contributions in line G of the remittance slip. Additional contributions for family benefits If the teacher wants to increase the value of their dependant s pension they may make payments by instalments that are deducted from their salary. Contributions in respect of these elections are classed as additional contributions (not Additional Pension) and should be deducted from the teacher s salary and submitted with the monthly remittance of all other contributions to the Teachers Pension Scheme. Additional Voluntary Contributions (AVCs) with Prudential A teacher can also pay additional contributions into the Scheme s AVC provision with Prudential. This can be either as a percentage of salary, or at a set monthly amount. These contributions should be remitted directly to Prudential Financial Services. For more information visit www.pru.co.uk/teachers/ or call 0845 070 0007. Refund of contributions deducted in error If you become aware that contributions have been deducted in error from current financial year salaries or a member has opted out of service within three months of taking up employment you should make the necessary refund including income tax and National Insurance adjustments via the payroll. Remember, this is not a repayment of contributions which is undertaken by the Teachers Pension Scheme subject to certain conditions after a member has left pensionable teaching. If you become aware that the Teachers Pension Scheme contributions have been deducted in error from previous financial years you should make the necessary refund to the teacher. HMRC have confirmed that, in such circumstances, there is no obligation on you to deduct income tax from the refund. The refund will be treated as taxable income received by the teacher in the tax year of payment. It is the teacher s responsibility to report this on their tax return. If you do deduct tax, it should be deducted at the basic rate and again the teacher should report this on their tax return. HMRC have confirmed that you should write to your local HMRC office to inform them of underpayments or overpayments in tax years prior to the current year. This is to ensure the correct NI rate is applied to NI contributions. You should take a credit for the refund from your monthly payment to Teachers Pensions and show the refund on the monthly payment slip. This adjustment must be shown on the annual audit return. Section 3: Scheme administration Employer guide 36

3.2 Managing contributions. (Continued) Residential emoluments The Teachers Pensions Regulations allow the value of free accommodation to be included in contributable salary where you have agreed this with the Teachers Pension Scheme. This arrangement is known as a residential emolument. Here are some things to remember about residential emoluments: 1 They're not automatically carried over from one post holder to the replacement. 2 You have three months from the start of the employment (or from when the accommodation becomes available) to agree the emolument with Teachers Pensions. However, they will need written evidence of the valuation calculations before they accept residual emolument as part of a teacher s contributable salary. 3 The emolument should be reviewed every two years or the agreement may be rescinded and the contributions refunded. 4 The valuation used consists of current gross annual value of the residence, as certified by an estate agent, i.e. the rental value of the property if let on the open market, subject to a limitation of onesixth of contributable salary. In order to do this you will need to provide a current gross rental valuation of the property as certified by an Estate Agent. This will be subject to a limitation of 1/6th of contributable salary. The gross annual salary rate should also be provided. 5 As well as this, the annual Council Tax and costs of amenities (like heating, lighting and water) may be added to the calculation if these are provided free of charge. 6 Where a residential emolument is accepted by Teachers Pensions, pension contributions are payable on it, by both the scheme member and you from the date of occupancy of the property. This continues as long as the teacher remains in the property. Payment of contributions to the Teachers Pension Scheme The Teachers Pensions Regulations require employers to remit the contributions deducted from teachers salaries and their employers contributions to the Teachers Pension Scheme within seven days after the end of the month to which the contributions relate. Where the seventh of the month falls on a weekend or bank holiday, the contributions must be received by the last working day before the seventh. Contributions should be paid by electronic transfer, cheque or at the counter of a bank with electronic transfer the best guarantee that payment will be received. At least three bank working days must be allowed for all payments made at the counter of a bank. If all contributions due are not received within seven days of the last day of the month to which they relate, compound interest will be calculated for each day s delay. Documentation for payment of contributions We monitor monthly payments and failure to pay at the correct rates or provide an acceptable explanation for any variance will result in a report to the DfE who will determine appropriate follow-up action. So it s important you get everything right. 1 The correct paying-in slip should be completed each month to provide an accurate statement along with the contributory salary bill on which the contributions are based. This should be completed and submitted via the Employer Portal. 2 The teachers and employers contributions must be collected at the appropriate percentage of the teachers monthly contributable salaries. If not, you need to provide an explanation of the variance. 3 Remittances must be made to the Teachers Pension Scheme on or before the seventh of the month following the month the contributions relate to. Regardless of the method of payment used, the Employer Portal paying-in slips must be completed and returned to Teachers Pensions by no later than the payment date. 4 For employers using third party payroll providers a separate monthly slip is required for each employer. For LAs providing services for Academies, a separate slip should be provided for the LA and each academy. Section 3: Scheme administration Employer guide 37

3.3 Providing service, salary and additional contributions information. You are required under the Teachers Pensions Regulations to submit annual returns for all teachers in your employment at 31 March each year. If you outsource payroll, arrangements must be in place to provide you with the information you need to submit a full return. You should check any data received from a third party before sending it to the Teachers Pension Scheme. This Annual Return Data must be submitted to the Teachers Pension Scheme by no later than 6 July. Method of returns Our Annual Return facility has been developed on the Employer Portal. One of the key advantages of using the Portal is that a member s records are updated in real time so any queries are returned automatically. Here s how you can return data to us. Annual Return This is a template via the Employer Portal produced from your own system. It must be formatted and copied into the Annual Return template that is available on the Portal before uploading onto the system. With this method, you will not be sent a service return by Teachers Pensions. PC Application This is a software program provided by Teachers Pensions. A file will be loaded onto the Employer Portal for you to download. This enables you to update all the projected details we hold on our records for your teachers. Once you have updated all the records you need to export the data and upload the export file onto the Employer Portal. 3.4 Providing service and salary information. Accuracy of data Over recent years the data presented on annual returns has given cause for concern. It is important that checks are made to ensure that the required data fields are present and the correct service and salary details included. A list of the most common errors is shown on our website at www.teacherspensions.co.uk. When members retire their average salary period may go back over 10 years and care must be taken to ensure the accuracy of the data as any errors will impact upon this calculation. You may be asked to undertake an investigation of submitted salaries from the past if a member considers that an error has been made. Teachers will be informed of the current salary held for them by the Teachers Pension Scheme on their annual estimate of benefits. Timing All returns must be completed and submitted no later than 6 July. An annex will be issued to all employers in January each year. Employers choose the method they wish to use to complete the Annual Return. During April we will issue your chosen medium with the teacher records held. SCHEDPRINT This is an Excel Spreadsheet provided by Teachers Pensions to enable you to update all the projected details we hold on our system for your teachers. Once you have updated all the records you need to save the file and upload it directly onto the Employer Portal. Section 3: Scheme administration Employer guide 38

3.5 Contributions. Arrears of contributions As has been explained, you re responsible for deducting teacher contributions, and for remitting both these and employer contributions to the Teachers Pension Scheme within seven days of the end of each month. If you don t fulfil these responsibilities and any employment is subsequently identified as pensionable, then arrears of contributions are due. Here s what happens: 1 Where you have not deducted and remitted contributions, the Teachers Pensions Regulations allow for the charging of interest, compounded with monthly rests, until the amount is paid. The rate of interest is the Superannuation Contributions Adjusted for Past Experience discount rate set by the Treasury. 2 If we identify that contributions have not been deducted correctly, we will issue an invoice for arrears of contributions. These invoices must be paid immediately. 3 Where payment is not received, we may issue a revised invoice which takes into account recalculated compound interest. How missing contributions are identified Missing contributions can be identified in a number of ways. A teacher receives their annual benefit statement and queries a period of missing service. If this service was pensionable, the Teachers Pension Scheme will generate an invoice once the exact service and salary details have been provided by their employer. You may discover that a teacher has missing service and provide the Teachers Pension Scheme with the necessary service and salary details so that an invoice can be issued. HMRC inform the Teachers Pension Scheme that a teacher is paying National Insurance contributions at a rate which indicates that they should be a teacher of the Teachers Pension Scheme. Where appropriate we will write to you to obtain service and salary details before issuing an invoice for the arrears of contributions. Please note should your members have queries with contributions or service it is your responsibility to provide this information to Teachers Pensions. Section 3: Scheme administration Employer guide 39

3.6 Providing service and salary information. How we issue invoices We issue invoices to designated contacts. Where, for example, no contact exists in relation to independent schools the invoice will be addressed to the School Bursar. In the case of LAs, and in the absence of a designated contact, invoices will be issued to the person providing the service and salary information. If you would like us to issue invoices to a designated contact point then please email tpconts@teacherspensions.co.uk. Where a teacher is still working for you, you ll be invoiced for both teacher and employer contributions. Where a teacher is no longer employed by you, the Teachers Pension Scheme will invoice you for the employer contributions (plus compound interest on the employer contributions only) and invoice the ex-teacher for the teacher contributions separately. Your responsibilities around invoicing If you receive an invoice you have to make payment immediately or you run the risk of further interest being added to the amount. Fourteen days after issue we will send you a prompt to make sure the invoice was received and is being processed. Retrospective part-time elections Where a retrospective part-time election is agreed, payment is required within six weeks of the date of acceptance. If the invoice is not paid within 29 days, further interest will be charged. Where either party fails to make the payment within six weeks, the invoice will be cancelled. Any monies received from one party but not the other will be refunded, and the service will not be recognised as pensionable. Overseas Teachers: Opt-out forms Many overseas teachers are only resident in the UK for a year or so and therefore don t meet the twoyear qualifying period for pension benefits. It s your job to make overseas teachers aware of this so that they can make an informed decision as to whether they remain in the scheme or decide to opt-out. If the teacher decides to opt out, they should submit an election via My Pension Online www.teacherspensions.co.uk. Unless an opt-out form has been received and validated by the Teachers Pension Scheme, the teacher is a member of the Teachers Pension Scheme. Where in doubt you should deduct and remit contributions to the Teachers Pension Scheme. Interfund Transfers Where an employee has been incorrectly contributing to the Local Government Pension Scheme (LGPS) when they should have been a member of the Teachers Pension Scheme, the contributions from the LGPS should be paid to the Teachers Pension Scheme. This is known as an interfund transfer. The Teachers Pension Scheme will issue an invoice for the payment. You should notify us and provide the service and salary details. If contributions are paid into the scheme in error you need to notify us with specific dates in order for us to update the service record. Section 3: Scheme administration Employer guide 40

3.7 End of Year Certification (EOYC). Local Authorities All employers without exception are required to complete and submit an EOYC by the last working day in May of each year. Every April the Teachers Pension Scheme will send you a blank certificate completed only with the Contributions Received by Teachers Pensions in the year. You ll need to complete the form with information from your payroll reports. The form should be completed as detailed under action to be taken by all employers below and returned to us by the last working day in May. We ll then issue a second EOYC, which should be forwarded to your Audit Commission appointed auditor by the last working day in June, and must be audited and returned to us by the last working day in November. Action to be taken by all employers Completing the EOYC: The form has a number of sections to it. Sections 1 to 4 must be completed in all cases. Please ensure that the original document is the one that is returned to us. Section 1 Total contributory salary is the sum of all superannuable pay paid in the year to employees who are members of the Teachers' Pension Scheme. This figure should be derived from the payroll records and should not be calculated by grossing up the contribution deducted figures from section 2. The figure should include all superannuable pay for all teachers employed by the establishment including those whose pay is administered by an organisation other than the establishment. Only superannuable pay should be included, so total pay figures should be adjusted to exclude cases where a teacher: Has opted out of the Teachers' Pension Scheme. Is aged 75 or over. Is in part time non pensionable employment. Is already correctly contributing to the Local Government Pension Scheme. Is in receipt of non pensionable allowances, i.e. overtime. Is paying contributions on a former higher salary. Is paying additional contributions (PRESTON), due in the case of elections for retrospective access to the pension scheme by part-time employees. Section 2 Contributions deducted are those contributions due on the total contributory salary before any adjustments in respect of previous years and excluding amounts in respect of TR22 elections and the amount plus interest in respect of backdated EFE elections and contributions in respect of PRESTON payments (due in the case of elections for retrospective access to occupational pension schemes by part time workers). Please follow the guidance in the notes to the EOYC as to the information which should be entered in each box. Contributions Paid at Box 2g(v) has been completed by Teachers Pensions with the amounts received by Teachers Pensions in the year. If you don t agree with this figure you should contact us immediately. Don t make changes to this figure without prior consent from us. If you change the figure without discussion with Teachers Pensions your form will be returned to you. Section 3 Using the guidance in the notes to the EOYC, complete the Contributory Salary and Contributions at each tier. It s very important that the totals of each column agree to the equivalent entries in Section 2. Every effort should be made to complete this information, even if you have been unable to provide this information on your monthly contribution breakdown slips. If this section can t be completed or, there is a failure to be able to agree the totals to the equivalent entries in Section 2, the auditor will report that this section is incomplete and will comment if any testing suggests that incorrect tiers have been applied. Section 3: Scheme administration Employer guide 41

3.7 End of Year Certification (EOYC). (Continued) Section 4 This certificate must be signed by the Officer with Financial Responsibility i.e. the Chief Financial Officer. Forms can t be accepted without this section being signed. Please ensure that contact details are completed in case of a query on the EOYC. Section 5 Section 5 is for completion by your Audit Commission appointed auditor. Receipt of Unaudited Forms Although the first and second EOYC forms look very similar, they are different forms. The forms are tracked within Teachers Pensions and are specific to your establishment. Use of a generic form or a photocopy of an initial EOYC in place of a second EOYC may result in your return not being correctly recorded. First EOYC Form EOYCa LAs England Form can be returned unaudited Form EOYCb LAs Wales Form can be returned unaudited Second EOYC Form EOYCd LAs England Form must be returned audited Form EOYCe LAs Wales Form must be returned audited For returned unaudited forms where we ve agreed a change to the Contributions Paid value, the system will be updated with the agreed value prior to issuing the second EOYC. End of Year Certification - Non LA, including Academies Every April the Teachers Pension Scheme will send you a blank certificate completed only with the Contributions Received by Teachers Pensions in the year. You will need to complete the form with information from your payroll reports. The form should be completed as detailed under action to be taken by all employers below and returned to us by the last working day in May. All employers are required to send a completed EOYC by the last working day in May. When the EOYC is not audited we ll automatically issue a further EOYC which must be audited and returned to us by the last working day in September. Please ensure that you complete and forward your form in sufficient time for your auditor to complete the checks and return the form to us by the due date. You should also take a copy of the form for your records. Non-LAs don t have to complete a second EOYC if an Audited EOYC is returned by the last working day in May. In the case of an independent establishment where it s not possible for an auditor to sign, the certificate should be signed by a suitable person: An independent qualified accountant A nominated governor with a relevant accounting qualification or financial management background An individual approved for that purpose by Teachers' Pensions (e.g. external advisor with a relevant accounting qualification or financial management background. Where the establishment is unclear who would be eligible they should contact us and provide details of the individual who they wish to nominate for this purpose. Please note that the certificate can t be signed by an employee of the establishment. Action to be taken by all employers Completing the EOYC: The form has a number of sections to it. Sections 1 to 4 must be completed in all cases. Please ensure that the original document is the one that s returned to us. Section 3: Scheme administration Employer guide 42

3.7 End of Year Certification (EOYC). (Continued) Section 1 Total contributory salary is the sum of all superannuable pay paid in the year to employees who are members of the Teachers' Pension Scheme. This figure should be derived from the payroll records and should not be calculated by grossing up the contribution deducted figures from section 2. The figure should include all superannuable pay for all teachers employed by the establishment including those whose pay is administered by an organisation other than the establishment. Only superannuable pay should be included, so total pay figures should be adjusted to exclude cases where a teacher: Has opted out of the Teachers' Pension Scheme. Is aged 75 or over. Is in part time non pensionable employment. Is already correctly contributing to the Local Government Pension Scheme. Is in receipt of non pensionable allowances, i.e. overtime. Is paying contributions on a former higher salary. Is paying additional contributions (PRESTON), due in the case of elections for retrospective access to the pension scheme by part-time employees. Section 2 Contributions deducted are those contributions due on the total contributory salary before any adjustments in respect of previous years and excluding amounts in respect of TR22 elections and the amount plus interest in respect of backdated EFE elections and contributions in respect of PRESTON payments (due in the case of elections for retrospective access to occupational pension schemes to part-time workers). Please follow the guidance in the notes to the EOYC as to the information which should be entered in each box. Pensions. If you change the figure without discussion with us your form will be returned to you. Section 3 Using the guidance in the notes to the EOYC, complete the Contributory Salary and Contributions at each tier. It s very important that the totals of each column agree to the equivalent entries in Section 2. Every effort should be made to complete this information, even if you have been unable to provide this information on your monthly contribution breakdown slip. Failure to complete this section, or failure to be able to agree the totals to the equivalent entries in Section 2 will result in a Supplementary Tiered Contributions Certificate being issued, requiring additional audit work to be undertaken over and above the required standard certification Section 4 This certificate must be signed by the Officer with Financial Responsibility i.e. Head of Finance, Bursar, Chair of Governors, Head Teacher, etc. Forms can t be accepted without this section being signed. Please ensure that contact details are completed in case of a query on the EOYC. If your EOYC is being returned unaudited, please complete the date that you expect the audit to commence. This will ensure that we can provide you with a second EOYC in time for your audit and monitor when we can expect the audit to be completed. If you ve not received your form one week prior to your audit date, please contact Teachers Pensions for a duplicate. Contributions Paid at Box 2g(v) has been completed by Teachers Pensions with the amounts received by us in the year. If you don t agree with this figure you should contact us immediately. Don t make changes to this figure without the prior consent of Teachers Section 3: Scheme administration Employer guide 43

3.7 End of Year Certification (EOYC). (Continued) Sections 5 and 6 Section 5 or 6 is for completion by the firm or person undertaking your audit. If this section is completed and your form submitted by the last working day in May, there will be no requirement to complete a second EOYC. Receipt of Unaudited Forms Although the first and second EOYC forms look very similar, they are different forms. The forms are tracked within Teachers Pensions and are specific to your establishment. Use of a generic form or a photocopy of an initial EOYC in place of a second EOYC may result in your return not being correctly recorded. First EOYC Form EOYCc Second EOYC Form EOYCf Form can be returned unaudited Form must be returned audited For returned unaudited forms where we ve agreed a change to the Contributions Paid value, the system will be updated with the agreed value prior to issuing the second EOYC. 3.8 Audit Certification. Information for Auditors The form includes a reference to the pension contributions paid to the Teachers Pension Scheme. The auditor is entitled to form an opinion without qualification where they have carried out the tests listed below and is satisfied about the following: 1 The teacher and employer contributions have been correctly calculated for all of those required to contribute to the Scheme, based on the pensionable salaries paid and the appropriate contribution rates. 2 The correct amount has been paid. If an auditor is unable to form an opinion without qualification, they should: 1 Make simple amendments agreed with the employer in red on the EOYC and include subject to the amendments in red. No report is required. 2 Alternatively, where there are uncertainties or agreement can t be reached with the employer, auditors should set out the details surrounding it in a formal letter to Teachers Pensions. If amendments have been made and uncertainties or disagreements still remain, please include this in a letter attached to the form. Tests to be undertaken by auditors Please ensure that all relevant parts of the form are completed and check all calculations on the form. Ascertain the method of compilation of the form and the internal controls which apply. Consider to what extent they may be relied upon to produce accurately compiled returns and whether there are areas covered by the form which may have a high risk of error. Investigate any changes in the method of compilation of the form. Compare the form and working papers with those of the previous period. Obtain and corroborate explanations for significant variations. If the previous form resulted in adjustment to that return after any necessary Teachers Pension Scheme decision, ensure that the corrected approach has been followed in the current return. Section 3: Scheme administration Employer guide 44

3.8 Audit Certification. (Continued) Please check the following on the EOYC: Section 1 The total of Actual Contributory Salary agrees with the employers payroll records after taking account of excluded cases as set out in Note 2 to the EOYC. Section 2 The total Additional Pension payments ( section 2.a.i) agree with the employers payroll records; The total Additional Contributions (section 2.a.ii ) agree with the employers payroll records; The total basic teachers contributions (section 2.a.iii.) agree with the employers payroll records; The total employers contributions (section 2.a.iv. ) have been calculated in the relevant ratio to the Actual Contributory Salary in Section 1; The contributions due (section 2.a.v.) for teachers and employers contributions have been correctly calculated; The Arrears Paid in respect of Election for Further Employment (EFE) (section 2.b.v) are the arrears plus interest paid in respect of backdated EFE elections and agree with the employers payroll records; The total TR22 election amounts (section 2.d.v ) agree with the employers payroll records; The contributions paid in respect of this return are correctly analysed between the types of contribution made and that all figures agree with amounts paid as recorded by the employer, evidenced by bank records, and advised in the end of year report issued in May; That all figures in Section 2 correctly cast and calculate. Section 3 Teachers contributions at each Tier correctly reflect the applicable percentage rate when applied to the Contributory Salary at the same Tier and agree with the employers payroll records; Employers contributions at each Tier correctly reflect the applicable percentage rate when applied to the contributory salary at the same Tier and agree with the employers payroll records; Total of Contributory Salary agrees to the value at Section 1; Total of teachers contributions agrees to the value at Section 2a(ii); Total of employers contributions agrees to the value at Section 2a(iv); That all figures in Section 2 correctly cast and calculate. Should it not be possible to agree the values in Sections 1 and/or 2, additional certification work will be required in respect of tiered deductions. This work is detailed below and should be reported on the Supplemental Tiered Contribution Certificate. Section 4 Has section 4 been completed by the Officer with Financial Responsibility and been correctly signed and dated? Transaction Testing Make sure that contributions from anyone eligible to be a member of the Teachers Pension Scheme by virtue of Schedule 2 to the Regulations, including those who have elected to contribute to the scheme but excluding those who have opted not to do so, are brought to account on the return. Auditors should sample check pay records from which the return is compiled to confirm that: Only pensionable pay has been used to determine the contributions to be deducted under Regulation 15; Where members are employed part-time the correct contributions have been deducted; Where members are either paying additional contributions or purchasing additional pension the correct contributions have been deducted; Where employees haven t had contributions deducted, it was correct not to do so. The correct Tier has been applied, based on the teacher s full time equivalent salary; Back dated pay awards have been correctly applied and tiered contributions recalculated where necessary. The size of the sample will depend on the information provided by the employer about controls. Section 3: Scheme administration Employer guide 45

3.8 Audit Certification. (Continued) The circumstances in which contributions are not payable are where a teacher: Has opted out of the Teachers Pension Scheme. Is aged 75 or over. Is in receipt of non pensionable allowances e.g. overtime. Has been in continuing part-time employment from before 1 January 2007 and has not made a valid election to treat the service as pensionable. Has retired before 1 January 2007 (other than on ill health grounds) and has been in continuing employment before 1 January 2007 and did not make an EFE election. Circumstances which apply where contributions are paid at a non-standard rate include: A teacher has elected to buy additional years. A teacher has elected to buy additional pension. A teacher is paying contributions to re-instate earlier years of service for which contributions were previously withdrawn. A teacher has elected to pay contributions for additional family benefits. A teacher has elected to pay contributions on a former higher salary, TR22 elections. For a selection of teachers whose records show an additional contributions election, please check that the correct deductions are being made on the payroll. Auditors should refer to the list for employers provided by Teachers Pensions which indicates which teachers have elected to pay additional contributions. Common errors to look out for 1 The employer has not treated service as pensionable despite Teachers Pension Scheme membership being automatic for all teachers including re-employed teachers unless they opt out. 2 The employer hasn t treated part-time service as pensionable where a member has changed contract or taken up additional employment. 3 A teacher has changed employer and an election hasn t been identified by the new employer. 4 Contributions have been deducted in error by a new employer because a teacher has not notified them that they have opted out. 5 A teacher s election to pay additional contributions hasn t been implemented. 6 Teachers who are in receipt of ill health benefits don t have their contributions deducted when they return to full-time employment. 7 Non-deduction of contributions in respect of pensionable allowances. 8 Deductions of contributions in respect of an allowance that is not pensionable. 9 Incorrect rate of deduction for additional contributions or collection of additional contributions past the cessation date. 10 Payment of AVCs contributions to Teachers Pensions instead of the appropriate insurance company. 11 Payment of arrears relating to previous financial years. 12 Full time equivalent salary has been incorrectly calculated, resulting in the wrong tier being applied. Action taken by the Teachers Pension Scheme Teachers Pensions will reconcile your audited form on receipt, any discrepancies will be investigated and we ll ask you for an explanation. If your auditor agrees that there is an underpayment, this should be paid to the Teachers Pension Scheme immediately, accompanied by an Underpayment Paying in Slip. If the payment isn t received by the due date for audited returns, interest will be charged from the beginning of the financial year concerned, unless you re able to provide further information which confirms the month the underpayment occurred. If there is an overpayment you shouldn t take any action regarding this and await instruction from Teachers Pensions. Section 3: Scheme administration Employer guide 46

3.9 National Insurance. Contracted out details The Teachers Pension Scheme is accepted for the purposes of contracting-out of the State Earnings Related Pension Scheme and the State Second Pension (S2P). The following details may be useful: Teachers Pension Scheme number 49/684; ECON number E3900002R; and SCON number S2730011H HMRC registration HM00328821RM. National Insurance position The Teachers Pension Scheme is required to notify the HMRC of members who leave contracted-out employment and, within 48 weeks of their last day of employment, must pay a Contributions Equivalent Premium (CEP) to buy the teacher back into the state scheme for the period of teaching service. This information is correct at time of creation but is subject to change. Please Note. The terms teacher and teaching as used in this document refer to positions and employment covered by the Teachers Pension Scheme. Section 3: Scheme administration Employer guide 47