The Teachers’ Superannuation and Pension Scheme (Additional Voluntary Contributions) (Scotland) Regulations 2017

Made: 5th September 2017

Laid before the Scottish Parliament: 7th September 2017

Coming into force: 1st November 2017

In accordance with section 9(1) of the Superannuation Act 1972 and section 3(5) of the Public Service Pensions Act 2013, these Regulations are made with the consent of the Treasury[^f00003].

Citation, commencement and effect

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• (1) These Regulations may be cited as the Teachers’ Superannuation and Pension Scheme (Additional Voluntary Contributions) (Scotland) Regulations 2017 and come into force on 1st November 2017.

• (2) These Regulations have effect from 1st April 2015.

Interpretation

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• (1) In these Regulations, unless the context otherwise requires—

• “the 1999 Act” means the Welfare Reform and Pensions Act 1999[^f00004];

• “the 2004 Act” means the Finance Act 2004[^f00005];

• “the 1992 Regulations” means the Teachers’ Superannuation (Scotland) Regulations 1992[^f00006];

• “the 1995 Regulations” means the Teachers’ Superannuation (Additional Voluntary Contributions) (Scotland) Regulations 1995[^f00007];

• “the 2005 Regulations” means the Teachers’ Superannuation (Scotland) Regulations 2005[^f00008];

• “the 2014 Regulations” means the Teachers’ Pension Scheme (Scotland) (No. 2) Regulations 2014[^f00009];

• “authorised provider” has the meaning assigned to it by section 1 of the Superannuation Act 1972;

• “AVC policy age” means— except in the circumstances mentioned in sub-paragraphs (b), (c), (d) or (e), a person (P)’s normal pension age on the date P makes an election under regulation 4; if a transfer is made under regulation 10, a person (P)’s normal pension age at the date that written notice from P under regulation 10(1) is received by the Scottish Ministers; in respect of a pension credit member, the pension debit member’s normal pension age on the date that an election under regulation 4 is made by the pension debit member or notice from the pension debit member under regulation 10(1) is received by the Scottish Ministers; if a contributor or participator (P) realises all of the funds invested on P’s behalf under regulations 9(1) and 10(2) and makes a subsequent election under regulation 4, P’s normal pension age at the date of the subsequent election; if a person (P) is in pensionable service under the 2005 Regulations at the time of making an election under regulation 4, and has more than one normal pension age under regulation EA1(10) of those Regulations, P’s normal pension age in relation to P’s pensionable service on the date P makes the election;

• “the AVC Scheme” means the occupational pension scheme (within the meaning of section 1(1) of the Pension Schemes Act 1993[^f00010]) established under section 9 of the Superannuation Act 1972 and these Regulations;

• “civil partner” is to be construed in accordance with section 1 of the Civil Partnership Act 2004[^f00011];

• “contributor” is to be construed in accordance with regulation 7;

• “dependant”, in relation to either a participator or a contributor, means— any surviving spouse or surviving civil partner; any person who is a teacher’s child in accordance with regulation E26 of the 2005 Regulations or an eligible child in accordance with regulation 134 of the 2014 Regulations; any person in respect of whom at the time of death of the participator or contributor a nomination under regulation E26A or E27 of the 2005 Regulations or regulation 132 or 133 of the 2014 Regulations has effect; any surviving adult as defined in regulation 131 of the 2014 Regulations;

• “the Index” means the index of retail prices published by the Office for National Statistics;

• “insurance company” means— a person who has permission under Part 4A of the Financial Services and Markets Act 2000[^f00012] to effect or carry out contracts of long-term insurance; or an EEA firm of the kind mentioned in paragraph 5(d) of schedule 3 of that Act, which has permission under paragraph 15 of that schedule (as a result of qualifying for authorisation under paragraph 12(1) of that schedule) to effect or carry out contracts of long-term insurance;

• “Investment Linked Pension” means a pension which is linked to the performance of investments after it becomes payable and which is payable from the proceeds of an annuity policy authorised by the Scottish Ministers for the purposes of these Regulations and managed by an insurance company selected by them;

• “lump sum death benefit” means a lump sum which will become payable in the event of a person dying while paying regular contributions to provide for it;

• “normal pension age” in the case of a person who, at the time of making an election under regulation 4, is in pensionable service under the 2005 Regulations is to be construed in accordance with the 2005 Regulations, and in the case of a person who, at the time of making an election under regulation 4, is in pensionable service under the 2014 Regulations is to be construed in accordance with the 2014 Regulations;

• “participator” means— a contributor who has made a benefits election under regulation 12(6) in respect of all investments made under regulations 9(1) and 10(2) and has not made a further election under regulation 4 in respect of further pensionable service; a person who has ceased to be a contributor, not being a person in respect of whom the Scottish Ministers have paid a transfer value under regulation 11; or a person in respect of whom a transfer value has been accepted under regulation 10 and who is not otherwise a contributor;

• “pension commencement lump sum” is to be construed in accordance with Part 1 of schedule 29 of the 2004 Act;

• “pension credit” means a credit under section 29(1)(b) of the 1999 Act or under corresponding Northern Ireland legislation;

• “pension credit benefits” means, in relation to the AVC Scheme, the benefits payable under that Scheme which are attributable (directly or indirectly) to a pension credit;

• “pension credit member” means a person who has rights under the AVC Scheme which are attributable (directly or indirectly) to a pension credit either solely or wholly separately from any other rights under the AVC Scheme;

• “pension debit” means a debit under section 29(1)(a) of the 1999 Act or under corresponding Northern Ireland legislation;

• “pension debit member” means a person who has rights under the AVC Scheme and whose shareable rights under that Scheme are subject to a pension debit;

• “pension element” has the meaning given by regulation 5(2);

• “pension sharing order” means a pension sharing order or other provision referred to in section 28(1) of the 1999 Act or article 25(1) of the Welfare Reform and Pensions (Northern Ireland) Order 1999[^f00013];

• “pensionable service” is to be construed in accordance with section 37 of the Public Service Pensions Act 2013[^f00014];

• “person” means a person in eligible employment as a teacher in accordance with schedules 1 and 2 of the 2005 Regulations and schedule 1 of the 2014 Regulations;

• “qualifying recognised overseas pension scheme” is to be construed in accordance with section 169 of the 2004 Act;

• “registered pension scheme” has the same meaning as in 150(2) of the 2004 Act;

• “regular contributions” means contributions, paid pursuant to an election under regulation 4(1)(a) or (c);

• “retirement pension” has the meaning given by regulation 12(3);

• “salary” means— where a person is in pensionable service under the 2005 Regulations at the time the contribution is paid, the salary calculated in accordance with regulation C1 of the 1992 Regulations and regulation C1 of the 2005 Regulations; where a person is in pensionable service under the 2005 Regulations at the time the contribution is paid, in relation to contributions payable under regulation C9 of the 2005 Regulations, the salary determined in accordance with the provisions of those Regulations for the purposes of calculating those contributions; where a person is in pensionable service under the 2014 Regulations at the time the contribution is paid, in relation to pensionable earnings under Chapter 4 of Part 3 of the 2014 Regulations, the earnings determined in accordance with the provisions of that Chapter;

• “shareable rights” means any right a person has under the AVC Scheme except those rights referred to in regulation 2 of the Pension Sharing (Valuation) Regulations 2000[^f00015];

• “tax year” means the 12 months beginning with 6th April in any year;

• “uncrystallised fund pension lump sum” is to be construed in accordance with section 166 of the 2004 Act.

• (2) The definition of “insurance company” in paragraph (1) must be read with—

• (a) section 22 of the Financial Services and Markets Act 2000;

• (b) any relevant order under that section; and

• (c) schedule 2 of that Act.

• (3) For the purposes of these Regulations the annual equivalent of any lump sum is that lump sum divided by 12.

Making and acceptance of elections

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• (1) Any election under these Regulations—

• (a) is to be made by giving written notice to the Scottish Ministers; and

• (b) shall, subject to paragraphs (2) and (3), be accepted by them.

• (2) No election under these Regulations shall be accepted if—

• (a) in the case of an election under regulation 4(1)(c), the amount specified in the election as the amount to be secured is less than the amount specified in regulation 4(2)(d);

• (b) in the case of an election falling within regulation 17(2), any information required by that regulation is not given.

• (3) The date of an election under these Regulations shall be the date on which written notice is received by the Scottish Ministers.

Election to pay regular and lump sum contributions

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• (1) A person in pensionable service may at any time elect to pay—

• (a) regular contributions for investment under regulation 9(1);

• (b) a lump sum contribution for investment under regulation 9(1); or

• (c) regular contributions to provide for a lump sum death benefit under these Regulations.

• (2) The notice of such an election is to specify—

• (a) in the case of an election under paragraph (1)(a) or (c), the amount of each regular contribution or, if expressed as a percentage of salary, that percentage;

• (b) in the case of an election under paragraph (1)(b), the amount of the contribution;

• (c) in the case of an election under paragraph (1)(a) or (b), the fund or funds in which contributions are to be invested; and

• (d) in the case of an election under paragraph (1)(c), the amount to be secured which must not be less than £5,000.

Provision for lump sum death benefit

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• (1) This regulation shall apply where a person elects under regulation 4(1)(c) to pay regular contributions to provide for a lump sum death benefit.

• (2) A person who elects to pay regular contributions to provide for a lump sum death benefit may at the same time, or at any time while paying those contributions, elect that if the lump sum becomes payable, the whole or part of it (“the pension element”) shall be applied by the Scottish Ministers for the purchase of an annuity policy from an authorised provider to provide a pension or pensions for one or more dependants.

• (3) The notice of an election under paragraph (2) is to specify—

• (a) for whom a pension is, or pensions are, to be provided;

• (b) if more than one pension is to be provided, the proportion of the pension element that is to be applied to the purchase of each of them; and

• (c) in respect of every pension to be provided, whether the annual rate of the pension—

• (i) is to be fixed,

• (ii) is to vary in accordance with the Index,

• (iii) is to increase yearly by a specified percentage,

• (iv) where the authorised provider offers pensions which vary in accordance with an index of prices other than the Index, is to vary in accordance with the index specified in the notice, or

• (v) is to be an Investment Linked Pension.

• (4) A person (P) who has continued to pay regular contributions up to P’s AVC policy age, but does not then cease to be in pensionable service, may elect to pay regular contributions up to P’s first birthday after P reached AVC policy age to provide for a lump sum death benefit unless the authorised provider determines that provision under this regulation shall continue without the need for the authorised provider to verify P’s entitlement to that provision; and, so long as P has not ceased to be in pensionable service, further elections may be made annually in respect of years commencing on P’s first birthday after P reached AVC policy age and subsequent birthdays.

• (5) An election made by P under paragraph (4) lapses if P retires, ceases to be in pensionable service during the year in question or ceases to pay contributions pursuant to an election under regulation 4(1).

• (6) An election under regulation 4(1)(c) or an election under paragraph (4) shall have effect for the purpose of the entitlement to benefit from the date when the election is accepted by the Scottish Ministers.

Variation and cancellation of elections

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• (1) A contributor who has elected under regulation 4(1)(a) to pay regular contributions may at any time by giving written notice to the Scottish Ministers—

• (a) alter the amount of the regular contributions;

• (b) require any contributions payable pursuant to the election to be invested in future under regulation 9 in a different way;

• (c) require the Scottish Ministers to realise any investment and to reinvest the proceeds under regulation 9 in a different way; or

• (d) cancel the election under regulation 4(1)(a).

• (2) A contributor who has elected under regulation 4(1)(b) to pay a lump sum contribution may at any time by giving written notice to Scottish Ministers require the Scottish Ministers to realise any investment and to reinvest the proceeds, under regulation 9, in a different way.

• (3) A contributor who has elected to pay regular contributions under regulation 4(1)(c) may at any time by giving written notice to Scottish Ministers—

• (a) elect that a specified lower or larger sum is to be secured and the regular contributions adjusted accordingly;

• (b) if the contributor has made an election under regulation 5(2), cancel it or alter in any specified way the manner in which the pension element is to be applied; or

• (c) cancel the election made under regulation 4(1)(c).

• (4) A person paying further regular contributions pursuant to an election under regulation 5(4) may at any time make an election under regulation 5(2) or do anything authorised by paragraph (3).

• (5) The Scottish Ministers shall give effect as soon as is reasonably practicable to the terms of any notice given under this regulation.

Contributor

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• (1) Subject to paragraph (2), a person is a contributor while an election under regulation 4(1)(a) or (c) has effect or if the person has paid a lump sum pursuant to an election under regulation 4(1)(b).

• (2) Before 6th April 2015, a person ceases to be a contributor if that person—

• (a) has become entitled to retirement benefits under regulation E6 of the 2005 Regulations;

• (b) has, under regulation 6(1)(d) or 6(3)(c), cancelled the election to pay regular contributions; or

• (c) subject to paragraph (4), has ceased to be in pensionable service and is not paying contributions under regulation C9 of the 2005 Regulations or regulation 25 of the 2014 Regulations.

• (3) On and from 6th April 2015 onwards, a person (P) ceases to be a contributor if P—

• (a) has realised all of the funds invested on P’s behalf under regulations 9(1) and 10(2) and has not made a subsequent election under regulation 4 in respect of further pensionable service;

• (b) has, under regulation 6(1)(d) or 6(3)(c), cancelled the election to pay regular contributions; or

• (c) subject to paragraph (4), has ceased to be in pensionable service and is not paying contributions under regulation C9 of the 2005 Regulations or regulation 25 of the 2014 Regulations.

• (4) For the purposes of this regulation a person who—

• (a) has ceased to be in pensionable service; and

• (b) has re-entered pensionable service within 3 months,

is to be treated as having continued to be in pensionable service.

Payment of contributions and amount of regular contributions

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• (1) Regular contributions shall be paid to the Scottish Ministers at intervals of one month.

• (2) Payment of regular contributions under paragraph (1) shall be effected by deduction by the contributor’s employer of the appropriate amounts from the contributor’s salary and such deductions shall—

• (a) commence to be made from the salary in respect of the first whole pay period falling after the date on which the employer receives authorisation to make these deductions; and

• (b) be remitted to Scottish Ministers within 7 days after their deduction.

Investment of contributions

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• (1) Any contributions paid by a contributor for investment under this regulation shall be invested by the Scottish Ministers, in accordance with any notice under regulation 4(2) or 6(1) or (2), in one or more of the funds authorised by them for the purposes of these Regulations managed by an insurance company selected by them.

• (2) Regular contributions to provide for a lump sum death benefit shall be invested by the Scottish Ministers with an insurance company selected by them so as to secure the payment of a lump sum death benefit of the amount required by any notice under regulation 4(2) or 6(3).

Inward transfers

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