Employers' Guide

Section 16 - Audit Certification

1. Action to be taken by employers

Following the EOYC exercise LAs will receive form TR17 and all other employers will receive form TR17/17A.  Notes for guidance for completion of these forms are on the reverse side of the form.

The TR17 will include the annual summaries of the monthly entries on the EOYC.  These summaries must be checked by auditors or responsible officers who are required to sign the certificate on the form when their checks are completed. Instructions for the certification of form TR17 (LAs) are passed direct to auditors appointed by the Audit Commission. If you are a Local Authority you must send the form TR17 to your auditor, or make it available to them, no later than the 30 June. At this point you need to notify Teachers’ Pensions that this has been done and provide them with a copy of the unaudited form.  After forming their opinion, the auditors must return the signed form to reach TP no later than 30 September.

For Non Local Authority employers once you have completed the appropriate section of the TR17/17A form, it should be forwarded to your auditor in sufficient time to complete the checks and return the form to reach TP by no later than 30 September.  You should take a copy for your records. This auditor certificate is separate from the annual return of service, salary and additional contributions information which is submitted for individual teachers with a due date of 31 August each year.

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2. Action taken by TP

On receipt of the form TR17/17A, TP will check sections 1 to 3. Discrepancies will be investigated by TP and we will ask you for an explanation. Refunds of overpayments will be made by TP after the audited copy of form TR17/17A is received. If an underpayment is discovered, this should be paid to TP immediately, accompanied by a paying in slip stating that it is an end of year adjustment (with March in the month box),  by 30 September. If the payment has not been received by the due date, it should still be paid as soon as possible but you will be asked to provide a monthly schedule of contributions due and paid. Interest will then be calculated as required by the current Teachers' Pensions Regulations.

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3. Information for auditors

The TR17/17A includes a reference to the pension contributions paid to TP. The auditor is entitled to form an opinion without qualification where he has carried out the tests listed below in Section 4 and is satisfied:

  • that teacher and employer contributions have been correctly calculated for of all those required to contribute to the scheme, based on the pensionable salaries paid and the appropriate contribution rates; and
  • that the correct amount has been paid.

 

When the auditor considers that he is unable to form an opinion without qualification, he should:

  • where the amendments are simple and agreed with the employer, make them in red on the form TR17/17A and include "subject to the amendments in red". No report is required; or
  • where there are uncertainties or disagreement with the employer, set out the reasons for concern and any matters in dispute in the form of a formal letter to TP

If uncertainties or disagreements remain although amendments have been made, please include this in a letter attached to TR17/17A.

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4. Tests to be undertaken by auditors

Please ensure that all relevant parts of the form TR17/17A are completed then check all the arithmetic on the form TR17/17A.

  • Ascertain the method of compilation of the form TR17/17A 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 TR17/17A which may have a high risk of error.
  • Investigate any changes in the method of compilation of the form TR17/17A.
  • Compare the form TR17/17A and working papers with those of the previous period.
  • Obtain and corroborate explanations for significant variations. If the previous form TR17/17A resulted in adjustment to that return after any necessary TP decision, ensure that the corrected approach has been followed in the current return.

 

Agree the compilation of Form TR17/17A and reconcile it with the employer’s payroll, accounts and related records.

Please check that:

  • the total of teachers' salaries at section 1 of form TR17/17A agrees with the employers' payroll records;
  • the total additional contributions at section 2.a.i, ii of form TR17/17A agree with the employers' payroll records;
  • the total TR22 election amounts at Section 2.f.ii of form TR17/17A agree with the employers' payroll records;
  • the amounts at Section 2ciii and iv are the arrears plus interest paid in respect of backdated EFE elections and agree with the employers' payroll records;
  • the total basic teachers' contributions at section 2.a.iii. of form TR17/17A agree with the employers' payroll records;
  • the total employers' contributions at section 2.a.iv. of form TR17/17A have been calculated in the relevant ratio to the teachers' basic contributions;
  • the contributions due at section 2.a.v. of form TR17/17A for teachers' and employers' contributions have been correctly calculated;
  • 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 and advised in the end of year report issued in April each year; and
  • that all figures on form TR17/17A have been calculated correctly.

 

Ensure that contributions in respect of all persons eligible to be members of the TPS 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; and
  • where members are either paying additional contributions or purchasing additional pension the correct contributions have been deducted.

 

The extent of this testing will depend on the information provided by the employer about controls. In particular please substantiate any variation from the normal 6.4% contribution. The circumstances in which contributions are not payable are where:

  • a teacher has opted out of the Teachers Pension Scheme;
  • a teacher is aged 75 or over;
  • a teacher 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;
  • a teacher 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-in 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.

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5. Common errors

  • The employer has not treated service as pensionable despite TPS membership being automatic for all teachers including re-employed teachers unless they opt out.
  • The employer has not treated part time service as pensionable where a member has changed contract or taken up additional employment.
  • Where a teacher changes employer and an election has not been identified by the new employer.
  • The deduction of contributions in error by a new employer when a teacher has not notified them that they have opted out.
  • Non implementation of election to pay any additional contributions.
  • Non deduction of contributions on full time re-employment in the case of teachers who are in receipt of ill-health benefits.
  • Non deduction of contributions in respect of pensionable allowances.
  • Deductions of contributions in respect of an allowance that is not pensionable.
  • Incorrect rate of deduction for additional contributions.
  • Collection of additional contributions past the cessation date.
  • Payment of TAVC contributions to Teachers' Pensions instead of the appropriate insurance company.

 

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 TP which indicates which teachers who have elected to pay additional contributions.

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