| |
PART E
BENEFITS
Overriding provision as to guaranteed minimum pensions
E1.
- (1) This regulation applies where a person's pensionable employment is contracted-out employment.
(2) Where this regulation applies it overrides anything in these Regulations that is inconsistent with it, except regulations E14 (abatement on re-employment) and E18 (deferment, etc. of benefits).
(3) Where this regulation applies and the person, in relation to employment up to 6th April 1997, has a guaranteed minimum in relation to benefits under these Regulations -
(a) unless on the cessation of the pensionable employment he is entitled to a retirement pension at a higher rate, he is from the date on which he attains state pensionable age entitled to a pension at a weekly rate equal to his guaranteed minimum,
(b) if he attains state pensionable age while in pensionable employment, continues in the same employment for a further period of 5 years and does not then cease to hold it, he is (unless he consents to a postponement of the entitlement) entitled from the end of that period to so much of his retirement pension as equals his guaranteed minimum,
(c) in the case of a man who dies at any time and leaves a widow, unless she is entitled to a widow's pension at a higher rate she is, during any such period as is mentioned in section 17(5) of the 1993 Act, entitled to a pension at a weekly rate equal to half his guaranteed minimum, and
(d) in the case of a woman who dies at any time leaving a widower who is not entitled to a widower's pension at a higher rate, in circumstances prescribed under section 17(6) of the 1993 Act, the widower is entitled to a pension payable for the period so prescribed.
(4) The weekly rate of a widower's pension payable under paragraph (3)(d) is half of that part of the deceased's guaranteed minimum which is attributable to earnings factors for the period beginning with the tax year 1988-89 and ending with the tax year 1996-7.
(5) In paragraph (4) "earnings factors" means the earnings factors referred to in section 14(2) of the 1993 Act.
Nature of retirement benefits
E2.
Retirement benefits consist of -
(a) a retirement pension, and
(b) a retirement lump sum,
calculated in accordance with this Part.
Qualification for retirement benefits
E3.
- (1) A person is qualified for retirement benefits if -
(a) immediately before 6th April 1988 he would, but for his age, have been entitled under regulation 53 of the 1976 Regulations to payment of an annual allowance and an additional allowance by way of lump sum payment.
(b) immediately before 3rd February 1998 regulation E3(5) of the 1988 Regulations applied to him and he was qualified for retirement benefits under regulation E3 of those Regulations, or
(c) an appropriate qualifying period has been completed.
(2) An appropriate qualifying period -
(a) comprises every period of a kind described in Schedule 8 together with any period referred to in paragraph (4)(b), where that sub-paragraph applies, but excluding any contributions refund period, and
(b) may be discontinuous.
(3) If the person -
(a) was in pensionable employment, or paying contributions for a current period under regulation 30 of the 1976 Regulations on 6th April 1988, or
(b) entered pensionable employment after 6th April 1988 without having been in such employment before that date,
any qualifying period of 2 years is an appropriate one.
(4) If paragraph (3) does not apply, but the person was in pensionable employment before 6th April 1988 and subsequently entered pensionable employment again after that date, any qualifying period of -
(a) two years beginning on or after 6th April 1988; or
(b) such period beginning on or after 6th April 1988 as will, when taken with every period of a kind described in Schedule 9 to the 1988 Regulations before 6th April 1988, amount to 5 years
whichever is the shorter, is an appropriate one.
(5) For the purposes of paragraph (4) any period of the kind described in paragraph 4 of Schedule 8 (transfer value accepted) is to be treated as having begun after 5th April 1988.
(6) Notwithstanding that an appropriate qualifying period has not been completed, a person is qualified for retirement benefits -
(a) subject to paragraph (7), if he has a guaranteed minimum in relation to benefits under these Regulations, or
(b) if a transfer value was paid in respect of him by the Secretary of State to the superannuation scheme of the Commission of the European Communities and one has since been received by the Secretary of State from that scheme.
(7) If a contributions equivalent premium is paid by the Secretary of State, paragraph (6)(a) is to be treated as not having applied.
Entitlement to payment of retirement benefits
E4.
- (1) Subject to regulation E33(2) (application for payment), a person qualified for retirement benefits becomes entitled to payment of them in any of the Cases described in this regulation.
(2) In Case A the person -
(a) has attained the age of 60,
(b) has ceased to be in pensionable employment, and
(c) is not within Case B or D.
(3) In Case B the person -
(a) has attained the age of 60,
(b) has ceased after 31st March 1972 and after attaining that age to be in pensionable employment, but would have ceased to be in such employment before attaining that age had not the employment continued beyond the attainment of that age due to a period of paid sick leave, and
(c) has become incapacitated before attaining that age.
(4) In Case C the person -
(a) has not attained the age of 60,
(b) has ceased after 31st March 1972 and before attaining the age of 60 to be in pensionable employment,
(c) is incapacitated and became so before attaining the age of 60, and
(d) is not within Case D,
and, in cases where the pensionable employment ceased on or after 1st April 1997 the Secretary of State has notified the person in writing that he has not exercised, or is not considering the exercise of, his powers under regulation 10(2) or (10) of the Education (Teachers) Regulations 1993[1] to direct on grounds of that person's misconduct that he be not appointed to or employed in relevant employment as defined in regulation 7 of those Regulations.
(5) In Case D the person -
(a) has attained the age of 50,
(b) has ceased after attaining that age but before attaining the age of 60 to be in pensionable employment or excluded employment,
(c) is not within Case C, and
(d) has not received and is not to receive compensation under Part III of the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997[2] (discretionary compensation for termination), and his employer has notified the Secretary of State in writing -
(i) that his employment was terminated by reason of his redundancy or in the interests of the efficient discharge of the employer's functions, and
(ii) that the employer has agreed that he should become entitled to retirement benefits under this Case.
(6) If regulation 4(8) of the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997 (employer to notify for purposes of those Regulations if requested by governing body) applies, the employer must notify the Secretary of State as mentioned in paragraph (5) above.
(7) In Cases A and B the entitlement takes effect as soon as the person falls within the Case.
(8) In Case C the entitlement takes effect -
(a) where, immediately before the person became incapacitated he was in excluded employment, on the day after the last day of his excluded employment; and
(b) in any other case, as soon as the person falls within the Case or as soon as the person would have fallen within the Case had there not been a requirement that the Secretary of State notify that person that he has not exercised, or is not considering the exercise of, his powers of direction under regulation 10(2) or (10) of the Education (Teachers) Regulations 1993,
or (in all cases), if later, 6 months before the date of the last of any medical reports considered by the Secretary of State in determining under regulation H9 that the person had become incapacitated.
(9) In Case D the entitlement takes effect as from the day after the end of the employment.
(10) In no case shall a person be regarded as having ceased to be in pensionable employment until at least one day has passed without the person being in pensionable employment.
Amount of retirement pension
E5.
- (1) Subject to paragraphs (2) to (6) and regulations E7 to E10, the annual rate of a person's retirement pension is 1/80th of his average salary multiplied by his effective reckonable service.
(2) If -
(a) the person is entitled to count a period as reckonable service by virtue of regulation D3 (past period for which additional contributions have been paid), and
(b) by reason of regulation E32(3) part of that period does not count in calculating his retirement lump sum,
the annual rate calculated in accordance with paragraph (1) is, in respect of each year comprised in that part, increased by 1/350th of his average salary.
(3) Subject to paragraphs (4) to (6), where a person who has become entitled to payment of retirement benefits by virtue of regulation E4(5) has ceased to be in pensionable employment or excluded employment on or after 1st September 1997, the annual rate of the person's retirement pension shall be the annual rate of such pension calculated in accordance with paragraphs (1) and (2) and, where appropriate, regulations E7 or E9 but disregarding the effect of regulation E10, multiplied by the appropriate factor.
(4) Paragraph (3) does not apply where notice to terminate the person's employment was given or his resignation tendered on or before 22nd October 1996.
(5) If -
(a) the person has a guaranteed minimum in relation to employment up to 6th April 1997, and
(b)
where -
A is the annual equivalent of his guaranteed minimum pension together with that of any equivalent pension benefits, and
B is the annual rate calculated in accordance with paragraphs (1) and (2) and, where applicable, paragraph (3),
the annual rate of his retirement pension is A. (6) If a contributions equivalent premium has been paid in respect of the person and has not been refunded (and his entitlement to a guaranteed minimum pension is therefore extinguished) the annual rate of his retirement pension is reduced by the annual equivalent of the guaranteed minimum pension to which he would otherwise have been entitled.
Amount of retirement lump sum
E6.
- (1) Subject to paragraphs (2) and (3) and regulations E7 and E8, the amount of a person's retirement lump sum is
where -
A is 3/80th of the persons average salary,
B is his effective reckonable service (except any falling within C), and
C is any period which he is entitled to count as reckonable service by virtue of regulation D3 (past period for which additional contributions have been paid).
(2) If the person's effective reckonable service is restricted by regulation E32(2) the part of his retirement lump sum that is attributable to service before he attained the age of 60 is not to exceed his average salary multiplied by 1Þwb.
(3) Subject to paragraph (4), where a person who has become entitled to the payment of retirement benefits by virtue of regulation E4(5) has ceased to be in pensionable employment or excluded employment on or after 1st September 1997, the amount of the person's retirement lump sum shall be the amount calculated in accordance with paragraphs (1) and (2) multiplied by the appropriate factor.
(4) Paragraph (3) shall not apply where notice to terminate the person's employment was given or his resignation tendered on or before 22nd October 1996.
Limitation of retirement benefits in certain cases
E7.
- (1) Paragraphs (2) to (5) apply to a person who has made an election under regulation C1(6) of the 1988 Regulations or regulation C2(1) (reduced salary treated as having continued at previous rate) and whose average salary falls to be calculated by reference to the notional rate or, as the case may be, the rate specified in regulation C2(4).
(2) The annual rate of the person's retirement pension is not to exceed the fraction of the appropriate sum ascertained, by reference to the relevant age, from Table 1 below.
TABLE 1
|
Relevant age
|
Fraction
|
|
Under 50 |
1/2 |
|
50 |
2/5 |
|
51 |
3/10 |
|
52 |
1/5 |
|
53 |
1/10 |
|
54 |
1/14 |
(3) Where the person has been in pensionable employment for less than 20 years, his retirement lump sum is not to exceed 3/80ths of the appropriate sum multiplied by the total of his reckonable service and the period ascertained, by reference to the number of complete years he has been in pensionable employment, from Table 2 below.
TABLE 2
|
Years in pensionable employment
|
Period in years
|
|
19 |
17 |
|
18 |
15 |
|
17 |
13 |
|
16 |
11 |
|
15 |
9 |
|
14 |
7 |
|
13 |
5 |
|
12 |
4 |
|
11 |
3 |
|
10 |
2 |
|
9 |
1 |
|
Fewer than 9 |
0 |
(4) Where the person has been in pensionable employment for 20 years or more his retirement lump sum is not to exceed the appropriate sum multiplied by 1½.
(5) The appropriate sum is the greater of -
(a) the person's contributable salary for the best one of his last 5 years in pensionable employment, and
(b) 1/3rd of his aggregate contributable salary for his best 3 consecutive years in pensionable employment within the 10 years ending with its cessation,
and, for the purposes of paragraph (2), the relevant age is his age when he first entered pensionable employment, unless he was not continuously in pensionable employment in which case it is the figure obtained by subtracting the number of years in pensionable employment from 60.
(6) In this regulation references to "retirement pension" and "retirement lump sum" are references to such pension and lump sum before any actuarial reduction required by regulation E5(3) or E6(3).
Enhancement of retirement benefits in case of incapacity
E8.
- (1) This regulation applies to a person who has become entitled to payment of retirement benefits by virtue of regulation E4(3) or (4) by reason of his having become incapacitated before ceasing to be in pensionable employment, but only if -
(a) he had completed periods of the kinds described in Schedule 8 totalling at least 5 years, excluding any contributions refund period, and
(b) the application for payment required by regulation E33 is made within 6 months after the end of his pensionable employment.
(2) Subject to regulation E32(2) (limitation of effective reckonable service to 45 years, etc.), for the purpose of calculating the person's retirement benefits the effective reckonable service of a person to whom this regulation applies is to be treated as having been increased by the appropriate period.
(3) If the person's relevant service amounts to less than 10 years, the appropriate period is the shorter of -
(a) the length of his relevant service, and
(b) the period beginning when his pensionable employment ended and ending immediately before his 65th birthday.
(4) If the person's relevant service amounts to 10 years or more, the appropriate period is the longer of period A and period B.
(5) Period A is the shortest of -
(a) the period by which the person's relevant service falls short of 40 years,
(b) the period beginning when the person's pensionable employment ended and ending immediately before his 60th birthday, and
(c) 6 years and 243 days.
(6) Period B is so much of the period beginning when the person's pensionable employment ended and ending immediately before his 65th birthday as would not cause his effective reckonable service to be increased to more than 20 years.
(7) A person's relevant service is so much of his effective reckonable service as does not consist of periods that count -
(a) by virtue of regulation D3 (past period for which additional contributions have been paid), or
(b) by virtue of the application to him of regulation 7 of the 1976 Regulations (war service).
(8) For the purposes of this regulation a person is to be treated as having been in pensionable employment during any period for which he was paying additional contributions under regulation C9 or C10.
Avoidance of duplicate pensions
E9.
- (1) Subject to paragraph (2), this regulation applies where a person's effective reckonable service includes a period that also counts towards another pension payable directly or indirectly out of moneys provided by Parliament or by the rates or council tax levied by local authorities ("the double period").
(2) This regulation does not apply where the other pension is subject to reduction under Schedule D6 to the Local Government Pension Scheme Regulations 1995[3] or, when in force, regulation 142 of the Local Government Pension Scheme Regulations 1997[4] or where the other pension is payable under regulation 7 of the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997[5].
(3) Subject to paragraphs (4) and (5), where this regulation applies the person's retirement benefits are reduced by so much as is necessary to secure that
where -
A is the actuarial value of the retirement benefits in respect of the double period, and
B is the actuarial value of the other pension in respect of that period.
(4) A is not to be reduced to less than the actuarial value of
where -
C is the amount of the contributions paid by the person in respect of the double period, including any paid under regulation C9 or C10, and
D is interest on those contributions at 3% per annum, compounded with yearly rests, from the first day of the financial year following that in which they were paid to the date on which the person became entitled to payment of the retirement pension.
(5) A retirement pension is not to be reduced so that so much of it as is attributable to the double period falls below the rate of any equivalent pension benefits attributable to that period.
(6) For the purposes of this regulation -
(a) the other pension includes any sum payable, whether as a continuing allowance or as a lump sum, by way of pension, superannuation allowance, compensation for loss or abolition of office or otherwise in respect of retirement; and
(b) references to "retirement benefits" are references to such benefits before any actuarial reduction required by regulation E5(3) or E6(3).
National Insurance modification of pensions
E10.
Part I of Schedule 10 has effect for modifying the retirement pensions of persons who were in pensionable employment before 1st April 1980 including retirement pensions that have been actuarially reduced under regulation E5(3).
Allocation of part of retirement pension
E11.
- (1) A person who has become qualified for retirement benefits may, unless he becomes entitled to payment of them by virtue of regulation E4(4) (incapacity), allocate part of his retirement pension to the provision of an alternative benefit.
(2) The alternative benefit may be either -
(a) an annuity for life, commencing on the death of the person making the allocation ("the allocator"), for a surviving spouse or dependant, or
(b) an annuity payable to the allocator while the allocator and allocator's spouse are both alive, and if the spouse is the survivor a subsequent annuity for life, at twice the rate of the first annuity, for the spouse.
(3) The rates of the annuities mentioned in paragraph (2) shall be determined in accordance with tables prepared by the Government Actuary.
(4) An allocation must be made by delivering a declaration to the Secretary of State, and in paragraph (2) "spouse" refers to status at the time of its delivery.
(5) Further provisions as to an allocation under this regulation are contained in Schedule 11.
Duration of retirement pension
E12.
Subject to regulations E13 to E15 and E18, a retirement pension continues to be payable, at the rate at which it initially became payable in accordance with regulation E5, until the death of the person entitled to it.
Pensioner ceasing to be incapacitated
E13.
- (1) This regulation applies where a person who became entitled to payment of a teacher's pension by virtue of regulation E4(4) ceases to be incapacitated.
(2) On the person ceasing to be incapacitated the pension ceases to be payable, but any equivalent pension benefits continue to be payable.
(3) Subject to paragraph (4) and to regulation E33(2) (application for payment), the pension becomes payable again -
(a) from the person's 60th birthday, or
(b) if earlier, from the start of any renewed incapacity.
(4) Paragraph (3) does not apply if the person has been in pensionable employment at any time after he first became entitled to payment of the pension.
(5) If the pension becomes payable again under paragraph (3)(a) it is to be treated for the purposes of regulation E14 as one to the payment of which the person has become entitled by virtue of regulation E4(2).
Abatement of retirement pension during further employment
E14.
- (1) This regulation applies while a person who has become entitled to payment of a teacher's pension is employed -
(2) If the person is concurrently both in employment falling within paragraph (1)(a) and in employment falling within paragraph (1)(b), this regulation applies only in respect of the former.
(3) Where this regulation applies, the annual rate of the pension is reduced -
(a) If A equals or exceeds (C+D-E), to zero, and
(b) in any other case, and subject to paragraph (4), by the amount (if any) which is necessary to secure that (A+B) does not exceed
where -
A is the initial annual rate of the person's salary in the employment,
B is the reduced annual rate of the pension as increased under the Pensions (Increase) Act 1971[6] disregarding any actuarial reduction required by regulation E5(3),
C is, or where his previous pensionable employment was part-time is the full-time equivalent of, the highest annual rate of contributable salary that was payable to him during the 3 years ending immediately before he became entitled to payment of the pension, or, if applicable, the highest annual rate of contributable salary that was payable to him during the 3 years ending immediately before he ceased to be employed in any pensionable employment entered into by him after he became entitled to payment of the pension, whichever is the greater.
D is the amount (if any) by which, immediately before the first day of the employment, C would have been increased if it had been the annual rate of an official pension, within the meaning of section 5(1) of the Pensions (Increase) Act 1971 beginning, and first qualifying for increases under that Act, on the same date as the pension, and
E is any part of the pension allocated under regulation E11.
(4) Where regulation E5(3) applies the amount (if any) by which the annual rate of the pension is to be reduced under paragraph (3)(b) shall be the amount (if any) referred to in that sub-paragraph multiplied by the appropriate factor.
Notes:
[1]
S.I. 1993/543; relevant amending instruments are S.I. 1994/222 and S.I. 1995/2594.back
[2]
S.I. 1997/311.back
[3]
S.I. 1995/1019.back
[4]
S.I. 1997/1612.back
[5]
S.I. 1997/311.back
[6]
1971 c.56.back
| |
Other UK SIs |
Home |
National Assembly for Wales Statutory Instruments |
Scottish Statutory Instruments |
Statutory Rules of Northern Ireland |
Her Majesty's Stationery Office