Teachers’ Pension Scheme: proposed changes to scheme regulations Government consultation

TPS Pensions Policy Team
Department for Education
Bishopsgate House

28 May 2021

Dear Sir or Madam

Teachers’ Pension Scheme: proposed changes to scheme regulations Government consultation

Thank you for the Department’s consultation document inviting comments on proposed changes to the Teachers’ Pension Scheme (TPS).

I respond on behalf of the Local Government Association (LGA). The LGA is a politically led, cross-party membership organisation that works on behalf of councils to ensure local government has a strong, credible voice with national government. In total, 350 local authorities (LAs) are presently members of the LGA.

Overall, we agree that the draft amendments to the TPS regulations deliver the policy objectives as set out in the consultation document. This letter sets out the LGA’s comments on the consultation document.

Survivor benefits for female members with an opposite-sex spouse or civil partner

We agree that the proposed amendments to the Teachers’ Pensions Regulations 2010 achieve the policy aim set out in the consultation document; that the amendments will provide survivors’ benefits to a widower or male civil partner of a female member that has died since 5 December 2005, based on a member’s pensionable service from 1 April 1972 where the marriage or civil partnership took place before the member left pensionable service, or from 5 April 1978 where the marriage or civil partnership took place after the member left pensionable service.

In respect of the drafting of the amendments:

•    Paragraph 2(1) of Schedule 8 and paragraph 3(1) of Schedule 9 will be presented as a list where there will only be one item in the list. For example – 
“This paragraph applies where D is a woman who died before 5 December 2005 whose surviving adult is a 
(a)    a widower other than a widower with pre-1988 rights.”

•    Should there be a full stop, rather than a comma, at the end of the substitute paragraph 1(2)(h)(ii) of Schedule 8: 

“(ii) D had nominated a surviving nominated beneficiary by the time when that election was made and D’s surviving adult is a nominated beneficiary,”?

In respect of the implementation of the policy, some of the members whose service records will be reviewed were awarded premature retirement compensation (PRC) under the Teachers (Compensation for Redundancy and Premature Retirement) Regulations by their employers. We are seeking clarification as to whether the awards of discretionary PRC will also be looked at as part of the review. We would request that guidance is issued for employers to clarify any action they should be taking in respect of these cases, both where PRC has been administered by the scheme administrator and by employers.

For LAs, a significant number of members awarded PRC from 1972 to 1988 were working in universities or colleges that left LA control. There are limited records held by LAs in respect of these members, records are paper based and payroll systems have since changed. We would request that the scheme administrator leads any review of these PRC cases. 

We are aware that some members who were awarded discretionary PRC but did not have the minimum two years’ service from 6 April 1988 to qualify for survivors’ benefits and their widowers or male civil partners were not awarded a survivor’s pension under the PRC regulations. Subject to a review of PRC awards, will these cases be identified by the scheme administrator as part of the implementation of the changes? We would request that guidance is provided for employers.

Phased withdrawal of independent schools
We are satisfied that the policy aim for the introduction of a phased withdrawal of independent schools is achieved by the proposed changes to the 2010 and 2014 Teachers’ Pensions regulations.

We have the following comments on the draft regulations:

• We notice that there are slight differences proposed in the following key terminology to be used in the 2010 and 2014 regulations, in relation to accepted phased withdrawal schools. If there is not a specific reason for this, we would suggest that a consistent approach to the terminology is taken:
o The 2010 Regulations refer to accepted ‘phased withdrawal teacher’, whereas the 2014 Regulations refer to accepted ‘phased withdrawal member’. 
o The 2010 Regulations refer to a ‘type A guarantee’ and ‘type B guarantee’ whereas the 2014 Regulations refer to ‘guarantee type A’ and ‘guarantee type B’.

• Inserted regulation 13(7A) of the 2010 Regulations will say:
“In addition, where acceptance of a school as an accepted phased withdrawal school takes effect on an agreed date under regulation 13A, the school ceases to be an accepted school on that date.” 
For consistency with wording in regulation 13, should the reference to ‘school’ be a reference to ‘establishment’?
Similarly, should the reference to ‘school’ be a reference to ‘establishment’ in inserted paragraph 2(8) of Schedule 1, Part 1 of the 2014 Regulations?

• Regulation 13 of the 2010 Regulations will refer to a guarantee provided as part of an application made after 31 August 2010 as a ‘type A guarantee’. In particular, the ability to continue it under regulation 13A as a ‘type B guarantee’ and the ability to terminate the acceptance under regulation 13(6)(d). For guarantees that were provided for acceptances before 1 September 2010, how are those guarantees included into the amended regulations?
• Inserted regulation 13A(9)(b) of the 2010 Regulations will say:
““accepted phased withdrawal teacher” means—
(b) as from the date immediately after the end of a period of leave, which—
(i) is of a type specified in regulation 7(2)(b), and
(ii) has a continuous duration no longer than five years, a person who, immediately before the date agreed under paragraph (3), is in pensionable employment at the school but, because of that leave, is not so entitled,”
o Should this also cover leave which is of a type specified in 7(2)(c) (i.e. leave with entitlement to be paid statutory pay)? 
o In this case, the person is treated as being an ‘accepted phased withdrawal teacher’ from the date from returning from the leave. But this means that the person would not be in pensionable employment after the establishment becomes an ‘accepted phased withdrawal school’ while on the leave. This is because to be in pensionable employment the person must be in employment as a ‘phased withdrawal teacher employed by an accepted phased withdrawal school’. While on the leave, they will be employed by such an employer – but not as an accepted phased withdrawal teacher. Is the drafting of the regulation correct? This point is also relevant for corresponding changes in the 2014 Regulations, inserted regulation 2A.

Miscellaneous minor amendments

Amendment of Schedule 4 to the 2010 Regulations

• Draft regulation 11 will amend paragraph 11(3) of Schedule 4 so that references to ‘nominee’ are changed to references to ‘beneficiary’, so that it will read ‘the AP beneficiary’s death grant beneficiary or personal estate’.

• ‘The AP beneficiary’s death grant beneficiary or personal estate’ is not aligned to the wording of regulation 82 that sets out the ‘person to whom death grant is payable’. Should the wording of paragraph 11 be aligned to regulation 82? Regulation 82 pays a death grant to –
(1) The member’s nominee (if the nomination is effective, known as the death grant beneficiary) 
(2) Where there is no death grant beneficiary under (1), the surviving spouse, surviving civil partner or surviving qualifying partner
(3) Where there is no death grant beneficiary or survivor listed under (2), to the personal representatives.
• Paragraph 11 says that amount should be paid to either the death grant beneficiary (i.e. the nominee where the nomination had effect) or the personal estate. Paragraph 11 does not reflect the ordering in regulation 82, nor does it cover the surviving spouses, surviving civil partners and surviving qualifying partners. Also, the reference to ‘personal estate’ is inconsistent with the terminology used in regulation 82.

Amendment of regulations 24 and 192 to the 2014 Regulations

The amendments made to regulations 24 and 192 to the 2014 Regulations suggest that regulation 24 is disapplying membership in respect of two events, (paragraphs 24(1) and 24(2)) rather than a single event. For example, 24(1) gives the scheme manager the power to disapply pensionable service. Regulation 24(2) sets out how the scheme manager would exercise the power where the circumstances in 24(1) apply.

I hope the above is helpful; if you have any questions, please do not hesitate to contact me.

Yours faithfully

Jeff Houston
Head of Pensions