Teachers' Pensions

Calculating contributions

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The Monthly Contributions Breakdown form (which is available on the Employer Portal within the Templates sections) reflects the current contribution rates and should be used in 2016-2017 to advise Teachers’ Pensions of contributions deducted from April 2016 onwards. A new Contributions Breakdown form with new bandings will be available via the Portal from April 2017.

To access the Monthly Contributions Breakdown Form, firstly, log into the Employer Portal. Select Download a File and choose templates. Within the templates section you will be able to download the form. Please enable macros before inputting the information.

Once the amounts per tier have been inputted, please select ‘Save File’. This will generate a .csv output file. Please don’t change the file name or format prior to upload.

The contribution tiers changed from 1 April 2017 and are shown in the table below:-

Annual Salary Rate for the Eligible Employment from 1 April 2015 – 31 March 2017 Annual Salary Rate for the Eligible Employment from 1 April 2017  Member Contribution Rate 
 Up to £25,999.99  Up to £26,259.99  7.4%
 £26,000 to £34,999.99  £26,260 to £35,349.99  8.6%
 £35,000 to £41,499.99  £35,350 to £41,914.99  9.6%
 £41,500 to £54,999.99  
£41,915 to £55,549.99
 10.2%
 £55,000 to £74,999.99  £55,550 to £75,749.99  11.3%
 £75,000 and above  £75,750 and above  11.7%

Since September 2015, the Employer contribution rate is 16.48%, including the 0.08% administration levy. Employer contributions are based on the pensionable earnings  paid to the employee in the pay period. Teachers’ Pensions monitor monthly payments and failure to pay at the correct rates or provide an acceptable explanation for any variances will result in a report to the Department for Education. It is therefore extremely important that the correct years’ Monthly Contributions Breakdown form is completed, detailing contributions collected by tier and monies paid over, by the 7th of the following month (or earlier in the case of a weekend or bank holiday). User Guides, Forms and Factsheets can be found here.

The tiered rate of contributions is determined with reference to the member’s annual salary rate for a particular employment, rather than the full-time equivalent rate for it. This applies to members in the final salary arrangement and the career average arrangement. Where a teacher is a member of the Teachers’ Pension Scheme in respect of more than one employment (i.e. has two or more part-time jobs, or, for a member in the career average arrangement only, a full-time and a part-time job in the Teachers' Pension Scheme) the earnings in each employment will separately determine the contribution rate paid for each particular employment.

Teachers' Pension Regulations 2014, regulation 196(3)(b) provides that any arrears payable by reason of a retrospective increase are taken to become payable in the pay period in which they were paid. Employers will first need to determine the employees’ ‘annual salary rate’ for the pay period, in order to identify the band and corresponding contribution rate. Note that overtime or back dated pay increases are not included when determining the ‘annual salary rate’.

The contribution rate is then applied to the ‘pensionable earnings’ in the pay period. For members in the career average arrangement this will include overtime; for members in the final salary arrangement this will not include overtime. A back-dated pay increase is included in the ‘pensionable earnings’ in the pay period.

Contribution band rules

The following rules apply for determining the contribution band and tier for a pay period, and the treatment of pensionable pay in arrears and back-dated pensionable pay awards:

  • Where an employee is paid in the month they work (e.g. a “normal” contract hours employee), the contribution rate is based on the actual earnings in the pay period.
  • Teachers' Pension Regulations 2014, regulations 34 and 35 define pensionable earnings and regulation 185 defines member contribution rates.
  • Where the employee receives a payment for time worked before the pay period (so, for example, a supply teacher who is paid in Pay Period 2 for work carried out in Pay Period 1), the contribution rate is the rate that applies in Pay Period 2. That is to say that the only date that is relevant here is the date on which the money was paid.
    • This principle also applies to overtime payments earned in Pay Period 1 but paid in a later pay period.
    • Where pensionable pay relating to a period before a member ceased to be an active member is paid after the period of active membership has ended, it is to be treated as if it were received on the day before active membership ended.
  • Where an employee receives a backdated pay increase, relating to a period where they were a member of the scheme, the contribution rate that should be applied to the backdated payment is the contribution rate in force at the date the payment was made.

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.

If you become aware that 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’s the teacher’s responsibility to report this on their tax return.

Read our guides about contributions

The following rules apply for determining the contribution band and tier for a pay period, and the treatment of pensionable pay in arrears and back-dated pensionable pay awards:

  • Where an employee is paid in the month they work (e.g. a “normal” contract hours employee), the contribution rate is based on the actual earnings in the pay period.
  • Teachers' Pension Regulations 2014, regulations 34 and 35 define pensionable earnings and regulation 185 defines member contribution rates.
  • Where the employee receives a payment for time worked before the pay period (so, for example, a supply teacher who is paid in Pay Period 2 for work carried out in Pay Period 1), the contribution rate is the rate that applies in Pay Period 2. That is to say that the only date that is relevant here is the date on which the money was paid.
    • This principle also applies to overtime payments earned in Pay Period 1 but paid in a later pay period.
    • Where pensionable pay relating to a period before a member ceased to be an active member is paid after the period of active membership has ended, it is to be treated as if it were received on the day before active membership ended.
  • Where an employee receives a backdated pay increase, relating to a period where they were a member of the scheme, the contribution rate that should be applied to the backdated payment is the contribution rate in force at the date the payment was made.
Last Updated: 04/10/2017 16:29

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