Employers' FAQs
Frequently Asked Questions (last updated January 2012)
Service / Annual Return Related Queries Scheme Membership / Re-employment Related Queries Contributions Related Enquiries (including buying Additional Pension Benefits) Retirement Benefit Related Queries Estimates of Retirement Benefits Queries Tiered ContributionsAutomatic Part Time Membership - Part Time Decision Trees for Employers
Frequently Asked Questions about the End Of Year Certificate (EOYC)
Service / Annual Return Related Queries
Q. What is the difference between pensionable and reckonable service?
A. Pensionable service is how we describe, in our literature, service which is pensionable in the Teachers’ Pension Scheme. Reckonable service is specifically service which counts in the calculation of pension benefits. For example, a scheme member may be in pensionable service, or employment, for a year but only be credited with half a year’s reckonable service because she is on a part-time contract.
Q. How are Employers going to know if a teacher is in multiple employment?
A. Employers should ask the teacher before they take up an appointment if they are already employed elsewhere. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. How are Employers going to be informed if a teacher who is in multiple employment joins the scheme with another Employer?
A. Employers must complete form TR6 when a teacher takes up a new appointment. If the teacher is already employed a notification will be issued to the other employers to advise them to deduct pension contributions. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. Will annual return become more complicated because of members having age 60 and 65 retirement benefits?
A. No, there will be no change to the annual return because of different NPAs. Further information can be found in the Employer Guide under Annual return of service, salary and additional contributions.
Q. Will employers have to provide the last ten years of service on retirement application forms?
A. No, only information relating to the final two years of service.
Q. If an employer does not currently hold ten years service details do TP hold this information?
A. TP will hold the data provided it has been included on the relevant annual returns.
Q. Are there any restrictions to the amount of service that can be used in the calculation of a member’s retirement benefits?
A. The maximum total pensionable service that can be used in the calculation of retirement benefits is 45 years.
A further restriction may also apply as follows:
- If the member does not have any pensionable service after 01.01.2007 and accrues 40 years or more before reaching age 60 their benefits will be restricted. Their pension and lump sum will be based on 40 years plus any pensionable service accrued after reaching age 60.
- If the member does have pensionable service after 01.01.2007 and has accrued 40 years pensionable service prior to 01.01.2007 their benefits will be restricted. Their pension and lump sum will be based on 40 years plus their pensionable service accrued on or after 01.01.2007 (or pensionable service accrued since their 60th birthday if that is earlier than 01.01.2007).
Scheme Membership / Re-employment Related Queries
Q. What information are Employers expected to give new members of the scheme?
A. Employers should provide new appointees, both full and part-time with the Guide to the Scheme, if they have not previously received one and informing them that, without exception, they are automatically members of the scheme unless they opt out. Further information can be found in the Employer Guide under Employers responsibilities.
Q. Is it open for members to elect to be in the scheme with one employer and opt out with another?
A. No, members who opt out are opted out of all employment.
Q. Is there now a requirement for Employers to complete a TR6 for everyone?
A. Yes
Q. If a member is in concurrent service do we need a TR6 for each appointment?
A. No
Q. Are supply teachers now automatically members of the scheme?
A. Yes, all part time teachers who start a new contract on or after 1 January 2007 are automatically members of the scheme. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. Are casual teachers automatically in the scheme?
A. Yes, all teachers taking up employment on or after 1 January 2007 are automatically members of the scheme. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. Does automatic membership include visiting lecturers?
A. Yes, all teachers and lecturers taking up employment on or after 1 January 2007 are automatically members of the scheme. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. Are there a minimum number of hours a part timer has to work in order to be in the scheme?
A. No, all part time teachers who start a new contract on or after 1 January 2007 are automatically members of the scheme. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. If a part time member has currently opted out of the TPS is it open for them to opt back in?
A. Yes, a member may opt back into the TPS at any time. Further information can be found in the Employer Guide under Members Rejoining the TPS after previously opting out.
Q. If a member is currently opted out of the TPS is this still valid?
A. Yes, this remains valid until they opt back into the TPS.
Q. Must teachers complete an opt out form if they do not want to be members of the TPS?
A. Yes, if a teacher does not wish to join the TPS they must complete an opt out form. You should explain the benefits of the TPS to the teacher. Further information can be found in the Employer Guide under Members Opting out of the TPS. It may be possible for a teacher to submit an election to opt out of the scheme via My Pension Online (our secure website).
Q. How many times can a member opt in and out of the TPS?
A. The number of times a member may opt in and out of the TPS is unlimited.
Q. What is the timescale for back dating opt outs?
A. The rules surrounding opt outs remain the same and further information can be found in the Employer Guide under Members Opting out of the TPS.
Q. If a member has transferred out of the TPS but returns after 1/1/07 do they contribute under the new arrangements?
A. Yes
Q. Will retrospective part time elections still be accepted?
A. Only in exceptional circumstances. Comprehensive information will be required to support any retrospective election with an explanation as to why the election was not submitted at the correct time. They will, however be treated as a 1 January 2007 or later entrant in respect of all the service covered by the election.
Q. Are pensioners affected by the new rules?
A. If a retired member takes up an appointment on or after 1 January 2007 they are automatically members of the scheme. Further information can be found in the Employer Guide under Retired Teachers and Re-employment.
Q. Will EFE elections become obsolete?
A. Yes, but any existing elections will be honoured.
Back to the topContributions Related Enquiries (including buying Additional Pension Benefits)
Q. Is the contribution rate different for new and existing members?
A. No, the same rate applies to all members.
Q. Is there still a requirement to deduct contributions in respect of part time service if the member already works a full time contract?
A. No. Where a person is in full-time employment and at the same time in part-time employment the part-time employment is not pensionable employment. Where an election was made before 1st January 2007 that such part-time employment should be pensionable, any such part-time employment on or after 1st January 2007 is (despite the election) no longer pensionable.
Q. If someone is paying contributions on a full time contract to the LGPS can they pay contributions into the TPS for any additional teaching work?
A. Yes, they are automatically a member of the TPS for their part time work and unless they decide to opt out contributions must be deducted. Further information can be found in the Employer Guide under Full-time and Part-time Employment.
Q. Can Employers still do refunds of contributions?
A. Yes, further information can be found in the Employer Guide Refund of contributions deducted in error.
Q. Are payments of additional pension by instalments to be collected by Employers?
A. Yes and these should be submitted with the other monthly contributions. Further information can be found in the Employer Guide Deduction of contributions, Additional pension contributions.
Q. Is it open to Employers to buy additional pension on behalf of members?
A. Yes, further information can be found in the Employer Guide Increasing Pension Benefits, Additional Pension.
Q. Will the £5200 additional pension limit be reviewed?
A. Yes, the limit will be reviewed annually in line with RPI.
Q. Is the purchase of additional pension pro-rata for part timers?
A. No, part time members pay contributions at the same rate as the same as full time members.
Q. Can members now pay more than 15% in contributions?
A. Yes, if a member wishes to purchase additional pension. The only limit that remains is the overall £5,000 limit.
Back to the topRetirement Benefit Related Queries
Retirement conditions for Actuarially Adjusted Benefits (often referred to as Actuarially Reduced Benefits [ARB]), Age Retirement and Phased Retirement
Q. Is it possible to take a short period off without pay (as little as one day) and then become entitled to Actuarially Reduced (ARB) or Age Benefits?
A. It is not possible for an in-service member to take a "token break" in employment in order to become entitled to benefits in the TPS. As well as meeting the other retirement conditions, e.g qualifying service for benefits, there must be an actual cessation of employment.
If the individual is to be re-employed, this should be under a new contract of employment. Where a person is subsequently re-employed by the same employer, there should be a new contract with an expectation that the person would move to a different or changed role. If the person returns to substantively the same post, that should result from some form of recruitment process (e.g. open competition).
Q. Can I access my pension whilst in the same employment without the requirement for a cessation of employment?
A. Yes you can. You can access a proportion of your retirement lump sum and pension via phased retirement. There are certain conditions that must be applied before benefits can be taken – see below.
Q. What are the conditions for phased retirement?
A. For a member who remains in the same post and does not have a cessation of employment, phased retirement was introduced from 1 January 2007 so that a person can access at least 75% of their benefits whilst remaining in employment. This is subject to a reduction in their average salary of at least 20%, compared with an average of the 6 months salary prior to taking up the salary reduction. The reduction may be as a result of a reduction in hours, a switch to a lower paid post or a switch to a new non pensionable post, but within the educational sector. The reduction in the average salary must remain in place for a period of at least 12 months. The pension in payment is not assessed for abatement whilst the person is receiving phased retirement pension, but abatement may apply after the person is no longer in receipt of phased benefits.
Further details on phased retirement can be found in the Phased Retirement Leaflet.
Q. Are the entitlement conditions the same for ARB and Age?
A. Although the regulations require a break in employment of at least one day and a cessation of employment, ARB requires a break in both pensionable employment and employment which is no longer pensionable (known as ‘excluded employment’.)
The situation is slightly different for members who have attained Normal Pension Age (NPA), in that they can become entitled to ‘Age’ benefits if the member opts out of the scheme on or after NPA and enters excluded employment. They will become entitled to benefits from the date of entering excluded employment if this is on or after NPA (or in other words, the day after leaving pensionable employment). If a member applies for benefits some time after the payable date, the Age award is backdated to the payable date. The Age benefits payable are a retirement lump sum (if applicable) and pension, but the Age pension stops immediately, or at any point during the tax year depending on the amount of re-employment earnings. This is on account of the abatement provision.
Where can I find further guidance on retirement conditions?
This subject has been covered in TP News. The Spring issue of TP News set out the position regarding ARB under the heading of ‘Retirement conditions’:
TP News Spring 2011 (PDF)
The subsequent clarification regarding Age retirement is contained in the Summer issue below:
TP News Summer 2011 (PDF)
Follow this link to LGE bulletin 13, which also covers re-employment after ARB in slightly more detail:
LGE Bulletin 13
Below is LGE bulletin 15 which clarified the position regarding Age retirement:
LGE Bulletin 15
LGE Bulletin 17 provides further guidance:
LGE Bulletin 17
Information has also been posted on the Association of Colleges website, which can be accessed on the link below:
http://www.aoc.co.uk/
Q. Why do the regulations refer to a requirement to have at least a one day break?
A. The requirement to have at least one day without pensionable or excluded employment is particularly important in respect of members with more than one employment. All employments must have ceased at the same time in order to have a payable date. The member therefore becomes entitled to benefits on the day after leaving all such employment. Please note this does not negate the requirement for a cessation in the member's employment.
A. The abatement provision has been a feature of the Teachers’ Pension Scheme for many years, since at least the 1960s. The policy of abatement is to control the amount of money paid out of public funds. The intention was one of equity; to prevent a person receiving a combined income in terms of re-employment earnings and pension from public funds receiving more than an individual who has continued in employment without access to their pension.
Abatement applies to public sector pension schemes and is the reduction or suspension of a pension during a period of re-employment. If a retired member of the Teachers’ Pension Scheme returns to employment covered by the scheme or comparable employment in the UK (e.g. Scotland and Northern Ireland, the Channel Islands or the Isle of Man, known as ‘comparable British service’), then a person's pension and any Teachers’ premature compensation payable will be assessed for abatement. Re-employment in a post outside employment covered by the scheme (e.g. the private sector, or say the Civil Service) will not cause abatement of a member’s pension.
Abatement applies to members who have retired on Age or Premature grounds and those who have taken ill-health benefits prior to 1997 who are permitted to undertake a limited amount of work. As far as ill-health benefits are concerned, where other circumstances apply an ill-health pension will stop as a result of re-employment. Abatement does not apply to members who have taken Actuarially Reduced Benefits, (unless they have claimed unreduced benefits as well) or a member who is receiving phased retirement benefits.
Abatement can affect a person's pension if the re-employment earnings, pensions and premature retirement compensation exceed a person's index-linked ‘salary of reference’ in a particular tax year. Depending on the amount of re-employment earnings, if these exceed the earnings threshold, the pension will either cease immediately (6 April) or at some point during the tax year. Re-employed pensioners should complete a Certificate of Re-employment annually so that an assessment can be undertaken. A link to the Re-employment Certificate is set out below, but this can also be completed online by both the member and the employer through the secure area of the website My Pension Online.
Certificate of Re-employment Form (PDF)
Further details on re-employment can be found in the factsheet below:
Returning To Work Factsheet (PDF)
Q. What enhancement will be given to members who retire on ill-health when they have a normal pension age of 65?
A. The total amount of enhancement is half the service the teacher could have completed before NPA for TIB. This is the same for both member with a NPA of 60 and a NPA of 65. Further information can be found in the Employer Guide under Ill Health Retirement, General Background.
Q. Do the DfE Medical Advisers consider applications for ill-health using permanency criteria?
A. PIB will be awarded if a member is permanently unfit for teaching and TIB if in addition they are more than 90% incapacitated, are likely permanently to be so and unable to undertake any gainful employment. The Medical Advisers will determine whether the member is eligible to receive PIB before determining whether they can be awarded TIB. Each case will be looked at on its own merit. Further information can be found in the Employer Guide under Ill Health Retirement, The application process .
Q. If a member is rejected for ill-health under the current regulations but appeals after 1 January will the appeal be considered under new or old rules?
A. The appeal will be considered under the old rules if it is based on the original information provided with the application. If new information is provided, however, and it is deemed to be a new application, it will be considered under the new rules.
Q. Will there be a review process for members who have been accepted for partial ill-health benefits?
A. Only if the member takes up teaching employment when the pension will cease. Further information can be found in the Employer Guide under Ill Health Retirement, Other information.
Q. If a member is deemed to be unfit to teach and therefore receives ill-health benefits, can they continue to work in a school in a support role and still receive their benefits?
A. If PIB is awarded because the member is assessed as being permanently unable to teach but able to do other work then they may be able to take up a support role. If the member is awarded a TIB pension and wishes it to continue, they must provide the Secretary of State with a certificate from a registered medical practitioner. This must state that in the opinion of the medical practitioner, the member must still meet the medical condition for TIB to be paid. The nature of the proposed employment will also assist the Secretary of State in coming to a decision about whether or not the TIB pension can continue to be paid. In all cases, TP should be informed of the employment. Further information can be found in the Employer Guide under Ill Health Retirement, Other information.
Q. How many times can a member draw down on their pension under the phased retirement rules?
A. Members may take 2 phased retirements before taking final retirement. Further information can be found in the Employer Guide Phased retirement.
Q. Are there any changes to survivor partner benefits after retirement?
A. If the member retires or dies in service after 1 January 2007 a survivor’s pension may be paid to a nominated partner. Further information can be found in the Employer Guide Short term pension and the leaflet Survivor and death benefits.
Q. Is it an Employer’s responsibility to ensure that members receive partner nomination forms?
A. Employers should make members aware of the TPS changes including the introduction of partner benefits.
Q. How is the new average salary calculated?
A. An example of how the average salary calculation using the best 3 consecutive revalued earnings in the last 10 years before retirement can be found in the section headed Calculating Retirement Benefits in the Employers’ Guide.
Q. How is pensions increase applied to average salary?
A. Details of how pensions increase factors are applied to the 10 year average salary calculation can be found in the section headed Calculating Retirement Benefits in the Employers’ Guide.
Back to the topEstimates of Retirement Benefits Queries
Q. Will additional pension be shown separately on EORB’s?
A. Yes, these are a separate benefit from the teacher’s main TPS benefits.
Q. Are index linking figures available for Employers to enable them to provide estimates for their members?
A. Pensions Increase factors can be found in Employer Guide in Appendix 6: Pensions Increase.
Q. Will mixed service pensions be shown on EORB’s?
A. Yes
Q. When are EORBs issued and who are they sent to?
A. The exercise to issue EORBs starts following the receipt and processing of annual return submissions. This means that the earlier accurate returns are received the earlier TP are able to issue EORBs. ‘Real time’ EORBs are available to members on the website. TP issue EORBS to individual establishments to distribute to the members.
Back to the topTiered Contributions
For any member-related questions, please refer to the Member FAQs.
Banding
What is the complete basis for the banding assessment?
The cost of public service pensions has increased dramatically because people are living longer; on average ten years longer than in the 1970s. This means that the cost of providing public service pension schemes such as the Teachers’ Pension Scheme is increasing. That is why the Government commissioned Lord Hutton to undertake an independent review of pension provision in the public service and to make recommendations about how such pensions can be made sustainable and affordable, whilst remaining fair to the workforce and the taxpayer.
In his final report of 10 March 2011, Lord Hutton recommended “… that there was a rationale for short-term cost savings in recognition of the substantial unanticipated increases in longevity. In practice these savings could only be realised by increasing member contributions. The Commission recommended that any increase should be managed so as to protect the low paid, and if possible staged.”
The contribution increases being implemented on 1 April 2012 provide the first round of savings. The tier structure has been designed to be progressive while protection for the low paid has been secured.
Is the expectation that teachers can change banding mid-month and therefore have two different contribution rates in the same month?
No, a teacher’s contribution rate should be applied monthly based on the salary earned for that month. Therefore, a member’s gross monthly salary should be multiplied by 12 to get their full-time equivalent salary, and the relevant contribution rate for that salary should be paid that month.
Can temporary payments affect the banding assessment in the same way they affect FTE salary, for example GTC payment, meaning they could potentially pay a higher contribution rate in April than the rest of the year?
Any salary earned within a calendar month will determine the contribution rate to be applied for that month. For example:
Davina is a full time class room teacher earning £31,000 per year. For most of the year her salary is fixed and her monthly pay is £2,583, this means Davina would normally pay a contribution rate of 7.2%. In April however Davina receives a one off payment of £200 bringing her salary for that month to £2,783. To calculate her contribution rate for that month her salary is multiplied by 12 (2783 X 12) to give £33,396. This means that for April Davina will pay a contribution rate of 7.6%.
Will the banding for teachers with more than one contract be on a standalone basis? Or would the employment be aggregate and one percentage applied and if so how will this fit later into a CARE scheme?
If a teacher has more than one contract then each employer will be required to calculate the contribution rate based on the salary received for each contract. For example:
Hafsah has two part time teaching contracts. She works as a class room teacher on a 30% contract at a local secondary school and has a full time equivalent salary of £30,000. She also works as a subject leader at another secondary school on a 60% contract where she has a full time equivalent salary of £42,000. Each employer will need to calculate Hafsah’s contributions based on the salary they pay.
In her first contract she works 30% with an FTE of £30,000. Her contribution rate is therefore 7.2% for this employment. Her contribution is 7.2% of her monthly salary i.e. £30,000 / 100 X 30 = £9000 / 12 = £750; making a contribution of (7.2% of £750) = £54.
In her second employment she works 60% with an FTE of £42,000. Her contribution rate is therefore 8% for this employment. Her contribution is 8% of her monthly salary i.e. £42,000 / 100 X 60 = £25,200 / 12 = £2100; making a contribution of (8% of £2100) £168.
Monthly contributions
How will the monthly paying-in slip be adapted to reflect the different rates – will we have to give a detailed breakdown of the contributions per band each month?
Employers will need to report contributions per contribution tier. A new paying-in slip will be launched on 1st March, and needs to be used for April contributions, with the paying-in slip due by 7th May.
Will the changes be effective for service from April 2012 or deductions from April 2012?
The changes to contribution rates will be effective for service from April 2012. You must use the new paying-in slip to advise TP of contributions deducted from April 2012 onwards. The first paying-in slip for tiered contributions will be due by 7th May.
TR17
Will the TR17 process be changed?
Yes the TR17 process will change, as the TR17 will need to be re-designed to take into account each tier and the contributory salary due on all the tiers. Discussions are ongoing between the Department for Education, National Audit Office and TP, and an announcement will be made to employers once a decision is reached.
Year end
Will the End of Year Certificate (EOYC) be changed?
Yes the EOYC will change. Discussions are ongoing between the Department for Education, National Audit Office and TP, and an announcement will be made to employers once a decision is reached.
The EOYC applicable for the tiered contributions is not due until 30th April 2013. The EOYC due 30th April 2012 is for contributions payable under the single members’ rate of 6.4% for contributions payable April 2011 to March 12 and therefore has not changed.
Annual Service Return
Will the tiered contributions affect the Annual Service Return?
The introduction of tiered contributions does not impact on the Annual Return. There is no change and service lines should continue to be split where there is a change in salary.
Arrears
How should arrears be dealt with?
Arrears payments will need to be re-calculated depending on the month they relate to.
Where arrears payments are made, for example, in cases of backdated pay awards, you will need to determine the salary that was due in each of the previous months and adjust the contributions due for those months. Care needs to be taken as the salary increase could change a member contribution band. For example:
Adam receives a pay rise in September 2012 equal to £2400. However due to administrative restrictions the pay increase is not received by Adam until his November pay. The pay increase of £2400 is equal to £200 per month. In November Adam receives his salary and backdated pay award i.e. £3250 + £600 (3 months pay award)
To calculate Adam’s contributions for November you need to multiply his total salary earned in that month (£3250 + £200 = £3450) by 12 = £41400. This brings Adam within the 8.0% contributions band. For November therefore Adams contribution is £276.
Adam also received a pay increase in respect of September and October. This means his contributions for these months must be re-calculated. For example Adam’s contribution in September should be based on his new salary of £41400, producing a contribution of £276, as he has already paid £247 Adam needs to make an additional payment of £276-£247 = £29.
Supply teachers
Tiered contributions could be a particular problem with supply teachers and other claim based employees if the date worked is not known. How should this be dealt with?
Where arrears of salary are paid to a member, the contributions should be deducted based on the salary that should have been paid at the time the work was undertaken. For example, if a salary of £15,000 is paid in April relating to work undertaken in March then contributions should be deducted at 6.4%. If that same salary is paid in May relating to work undertaken in April then 7% should be deducted when that salary is paid.
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