Changes to the Scheme from 1 April 2022

As you’ll already be aware, the final salary (legacy) scheme is closing on 31 March 2022. From 1 April 2022 all active members will build up their pension benefits in the career average (reformed) section of the Scheme. Benefits built up in the final salary scheme up to and including 31 March 2022 are safe and will form part of the member’s pension when they retire.

Please advise affected members that they don’t have to do anything. Their Teachers’ Pension record will change automatically and from 1 April 2022, all pensionable service will be recorded in the career average scheme. We’re contacting members directly to advise them of this change and directing them to our website (This link opens in a new window) for further information.

Why’s this happening?

In 2015, the government introduced reforms to public service pension schemes, including the Teachers’ Pension Scheme, which moved most members to the career average scheme. Members who were within ten years of their normal pension age were provided protections which enabled them to remain in the final salary scheme. Younger members were denied these protections and transitioned into the career average scheme from 1 April 2015. The Court of Appeal found this approach to be discriminatory as scheme members were being treated differently depending on their age. Closure of the final salary scheme means all members are being treated equally. More information on the McCloud judgment can be found on our website (This link opens in a new window).

If you have employees who are still in the final salary scheme on 31 March 2022, there are some changes you need to be aware of and actions you must take.

• Full-time and additional part-time employment
  Unlike in the final salary scheme, if a member has one full-time employment and additional teaching employments, the additional teaching employments are pensionable in the career average scheme. The additional employment may have been pensionable in the LGPS, but once the member joins the career average scheme on 1 April 2022 their full-time and additional employment will become pensionable within the Scheme. If you have an employee who is currently participating in the LGPS, please arrange for contributions to be made and service and salary details to be reported to us from 1 April 2022 onwards. Members can, should they wish, opt-out of the Scheme in respect of their additional employment(s) by completing an opt-out form
• Opt-out elections
  Opt-out elections made under the final salary scheme carry forward and are applicable in the career average scheme. This means there’s no need to contractually enrol opted-out members because of the closure of the final salary scheme. However, it should be noted that auto-enrolment provisions do apply at the employer’s re-enrolment date.
• Overtime
  As overtime is pensionable in the career average scheme, contributions must be deducted in respect of all pensionable employment undertaken from 1 April 2022 and included within service and salary details
• Flexibilities
  Members moving into the career average scheme for the first time will have the opportunity to take additional flexibilities available under that scheme: Additional Pension, Faster Accrual and Buy Out. Further details on flexibilities can be found on our website (This link opens in a new window)
• Existing monthly Additional Pension elections
  Any elections for Additional Pension in the final salary scheme that were made before 1 April 2022 and are being paid for via monthly deduction from payroll will continue. These elections will continue to provide for Additional Pension Benefits within the final salary scheme
• 45 years of reckonable service reached
  Members who have reached 45 years of reckonable service in the final salary scheme were previously exempt from making pension contributions. From 1 April 2022 they’ll have to pay contributions under the career average scheme as they’ll be building up new pension benefits in this scheme. Please begin deducting contributions and continue submitting service and salary details to us
• Contact details
  Please advise members to register for an MPO and update their contact details to ensure updates are received.

To keep up to date with the changes please visit our website (This link opens in a new window) where you’ll also find helpful resources.