TEACHERS PENSION SCHEME (TPS) NYCC EARLY RETIREMENT POLICY January 2009

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1 TEACHERS PENSION SCHEME (TPS) NYCC EARLY RETIREMENT POLICY January INTRODUCTION This Policy is intended to cover all of the County Council s employees who have membership of the Teachers Pension Scheme, but specifically excludes retirement on the grounds of ill-health. Individuals covered by that particular circumstance will have consideration for retirement dealt with under the regulations of the Teachers Pension Scheme and the County Council s Attendance Management Policy. This policy is also entirely separate from both the County Council s Redundancy scheme and the Severance scheme for Teachers who are paid in accordance with the Schoolteachers Pay and Conditions Document, which assists the LA in securing the departure from service of teachers on efficiency grounds where it is in the interests of the service to do so. Neither the Severance Scheme nor the redundancy scheme allows early access to pension in advance of an individual s normal entitlement to access benefits under the terms of the Teachers Pension Scheme.. The normal age at which retirement benefits become payable is 65 years (60 years for teachers who joined the scheme prior to January 2007) though members may elect to retire with accrued benefits at the age of 60. This document sets out the County Council s Policy on early access to pension benefits through either a phased retirement or application for actuarially reduced retirement benefits. 2. ACCESS TO THE POLICY The persons covered by this Policy will be North Yorkshire County Council employees who are pensionable and are members of the Teachers Pension Scheme and who have attained the age of 55 years. The employment groups covered by the Policy are as follows: The Schoolteachers Pay and Conditions The Soulbury Committee (insofar as the staff concerned are members of the Teachers Pension Scheme). The JNC for Youth and Community Workers (insofar as the staff concerned are members of the Teachers Pension Scheme). 1

2 3. PHASED RETIREMENT (Note: All references to Teacher below should be taken to mean all employees who have membership of the Teachers Pension Scheme.) Teachers are now able to apply for phased retirement ; a new and flexible provision in the Teachers Pension Scheme. Phased retirement provides for a managed transition from work to retirement by enabling TPS members to continue to work in a reduced capacity whilst at the same time accessing some of their pension benefits. Further, it enables the Authority to retain important and specialist skills. Phased retirement is available, with the consent of the employer, to teachers aged 55 and over, who change the capacity in which they are working so that their pensionable salary is reduced by at least 25% compared to the average of the salary they have received during the preceding six months. This reduction, which must last for at least twelve months, could be as a result of moving to part time work or taking up a post with less responsibility either with the current or new employer. All teaching staff, including head teachers and deputy head teachers, are able to apply to the Authority for consent to phased retirement. If an application for phased retirement is approved and taken before normal pension age, retirement benefits will be actuarially reduced to take account of the fact that they have been put into payment early and will be in payment for longer. Note: It is the responsibility of the teacher to obtain estimates of any pension entitlements from the Teachers Pension Scheme. Allowing staff to retire on a phased basis has the following consequences: i) It can be used to benefit service delivery and/or the efficient operating of the Authority, particularly where there is a need for a transitional period to avoid the loss of much needed expertise and knowledge from the Authority. ii) There are no costs to be borne by the employer where an employee takes phased retirement. Applications may be for: a) Reduced hours within existing post. Any applications for reduced hours within the applicant s current post should be considered in conjunction with the NYCC Flexible Working policy. * OR b) Transfer to an existing vacant post of lesser responsibility within the same Service or different part of the organisation if the impact on the rest of the team allows. Any transitional arrangements should be considered fully. * *In preparing the business case for either of the above particular regard should be given to the potential benefits of retaining skills and expertise for a limited period to assist in the succession planning of the organisation. 2

3 An application for phased retirement must be made by the teacher to Teachers Pensions within three months of starting employment in a reduced capacity. The approval of the employer must be secured prior to any such application being submitted by the teacher. Note: The requirement for all Teachers Pensions forms, as set by Teachers Pensions and the DCSF, is that the employers section must be completed and authorised by a representative of the employer. For Teachers Pensions purposes, the employer is deemed as a representative of the Local Authority, including aided and foundation schools, therefore all forms should be submitted to the CYPS HR Pensions Team for completion and certification. Failure to do this may result in elections and contributions not being processed correctly and in turn financial penalties being applied by Teachers Pensions which will be recovered from school budgets. Employer approval process: 1) Applications should be made in writing to the teacher s line manager. 2) The line manager and the applicant should discuss whether the application can be supported after considering the options available and the needs of the service and/or the organisation. The line manager must consider: Whether there will be any consequential savings to the Authority Whether there will be any costs to the Authority (over establishment for example) Whether the phased retirement will facilitate an increase in efficiency of the Service in question, for example through the introduction of more effective working methods or the provision of an opportunity to introduce new skills into service delivery. Whether the phased retirement will assist in the succession planning of the Service/organisation Whether the phased retirement will facilitate reorganisation to improve service delivery The personal circumstances of the teacher Any other circumstances which may be relevant to the decision and which may contribute to the more efficient exercise of the Authority s functions. 3) Where the manager wishes to support an application which would result in a change to the staffing establishment he/she should follow the staffing changes process and submit Form SC1 with full details of the proposal, including any temporary over-establishment, to the relevant HR colleague. There should be a clear statement of how any increased costs are to be funded. Where the manager wishes to support an application which requires no change to the staffing establishment he/she should follow the staffing changes process and submit Form SC2 to evidence the terms on which the 3

4 applicant proposes to move into the new working arrangements or alternative post. Managers should note that any arrangements have to be in place for a minimum of twelve months. Note : Any applications made to TPS will be void and future pension payments will be suspended if the teacher s salary goes above the 25% reduction in the first twelve months after the phased retirement. FOR SCHOOLS: Approval to phased retirement will be at the discretion of the Governing Body. Applications should be made in writing addressed to the Headteacher or, in the case of the Headteacher making the application, to the Chair of Governors. In reaching a decision the Governing Body will have regard to a number of criteria: Whether there will be any consequential savings to the School Whether there will be any costs to the School(over establishment for example) Whether the phased retirement will facilitate an increase in efficiency of the School, for example through the introduction of more effective working methods or the provision of an opportunity to introduce new skills into the school. Whether the phased retirement will assist in the succession planning of the School Whether the phased retirement will facilitate reorganisation to improve service delivery The personal circumstances of the teacher Any other circumstances which may be relevant to the decision Where an application is made by a Headteacher, the Governing Body should consult with the Local Authority before any decisions are made. NOTE: Teachers may take phased retirement if their new appointment is a support role such as a classroom assistant in an educational establishment covered by the TPS. In the interests of equity amongst all staff, applications for phased retirement will not be approved in place of appropriate disciplinary action or formal action under the capability procedure. Note: The criteria applied must constitute a proportionate means of achieving a legitimate aim; for example, in terms of service delivery/efficiency. Under Age Discrimination legislation, it is not possible to determine an application for early or phased retirement on the grounds of age and/or length of service (or related costs). 4

5 4. ACTUARIALLY REDUCED PENSION (Note: All references to Teacher below should be taken to mean all employees who have membership of the Teachers Pension Scheme.) A teacher who is in pensionable employment or excluded employment after 30 March 2000 may access their retirement benefits before their normal retirement age if they are aged 55 and obtain the consent of their employer. The employer cannot withhold consent for more than 6 months from the date on which the application is made. There are no costs to be borne by the employer where an employee takes an actuarially reduced pension. Applications should be made in writing to the line manager at the earliest opportunity to enable the manager to plan for the effects on the Service of the early retirement. The line manager and the applicant should discuss whether the application can be supported to be effective from the proposed date. The manager should only consider delaying the effective date (within the maximum 6 months period) when they have a reasonable belief that there will be a significant negative effect on service delivery. No additional approvals will be required. Once the employer s consent has been confirmed the teacher will be responsible for making the application to Teachers Pensions to gain access to the benefits. Note: The requirement for all Teachers Pensions forms, as set by Teachers Pensions and the DCSF, is that the employers section must be completed and authorised by a representative of the employer. For Teachers Pensions purposes, the employer is deemed as a representative of the Local Authority, including aided and foundation schools, therefore all forms should be submitted to the CYPS HR Pensions Team for completion and certification. Failure to do this may result in elections and contributions not being processed correctly and in turn financial penalties being applied by Teachers Pensions which will be recovered from school budgets. Benefits will be actuarially reduced permanently, according to their age at retirement although the reduced pension will attract index linking. ARB cannot be awarded if the benefits are less than the guaranteed minimum pension. Note : It is the responsibility of the teacher to obtain estimates of any pension entitlements from the Teachers Pension Scheme. Note : If a member submits an application having left teaching but returns to teaching service before the nominated payable date then the application is void. Mjf /revised