Teachers’ Superannuation (Miscellaneous Amendments) (Jersey) Order 2016

Arrangement

Article

amendments to the teachers’ superannuation (existing members) (jersey) Order 1986  3

1                 Interpretation. 3

2                 Article 19A inserted. 3

3                 Article 32A inserted. 4

4                 Article 44 substituted. 4

5                 Articles 45 to 49 revoked. 5

6                 Articles 59A and 59B substituted. 5

amendments to the teachers’ superannuation (New members) (jersey) Order 2007  7

7                 Interpretation. 7

8                 Article 7 amended. 7

9                 Article 8 amended. 7

10              Article 12 substituted. 8

11              Articles 20 and 21 substituted. 9

12              Article 22 amended. 10

13              Article 33 amended. 11

14              Articles 34 and 34A substituted. 11

Amendments to the teachers’ superannuation (administration) (jersey) Order 2007  13

15              Interpretation. 13

16              Article 1 amended. 13

17              Article 20 amended. 13

18              Article 21 amended. 15

closing   16

19              Citation and commencement 16

 

 


Teachers’ Superannuation (Miscellaneous Amendments) (Jersey) Order 2016

Made                                                                   16th December 2016

Coming into force                                               23rd December 2016

THE CHIEF MINISTER, in pursuance of Articles 2 and 7 of the Teachers’ Superannuation (Jersey) Law 1979[1], orders as follows –

Part 1

amendments to the teachers’ superannuation (existing members) (jersey) Order 1986

1        Interpretation

In this Part “1986 Order” means the Teachers’ Superannuation (Existing Members) (Jersey) Order 1986[2].

2        Article 19A inserted

Immediately after the cross-heading “Added Years” and before Article 20 of the 1986 Order, there is inserted the following Article –

“19A Discontinuation of added years under Section B

(1)     Subject to paragraph (2), on the coming into force of the Teachers’ Superannuation (Miscellaneous Amendments) (Jersey) Order 2016[3], added years may not be purchased under Section B of this Part.

(2)     Notwithstanding paragraph (1), a teacher may continue to purchase added years under Section B of this Part provided he or she first commenced purchasing those added years before the coming into force of the Order referred to in paragraph (1), and does not cease purchasing them after the coming into force of that Order.

(3)     Nothing in this Article shall be taken to prevent a teacher who is purchasing added years under Section B of this Part from also entering into an AVC arrangement within the meaning of Article 32A.”.

3        Article 32A inserted

(1)     After Article 32 of the 1986 Order there are inserted the following cross-headings and Article –

“Section B1

Additional Voluntary Contributions

32A   Additional voluntary contributions – purchase of added years or days

(1)     A teacher may apply to the Management Board to enter into an arrangement to pay additional voluntary contributions (‘AVCs’) to the Fund, in order to be entitled to such added years or days as the Management Board, on the advice of the Actuary, shall decide.

(2)     The payment of AVCs shall be subject to such minimum and maximum amounts as the Management Board, on the advice of the Actuary, may determine and shall be calculated on the basis that there must be no actuarial cost to the Fund.

(3)     An application under paragraph (1) must be made in such manner as the Management Board requires and must specify whether the AVCs will be by way of –

(a)     a single payment deducted from the teacher’s annual salary by a specified monthly amount; or

(b)     a periodic payment of a fixed percentage, or specified amount of salary deducted from the teacher’s monthly salary.

(4)     If at any time, as a result of actuarial advice, any change occurs or is likely to occur in respect of an amount determined under paragraph (2), the Management Board shall notify the teacher accordingly, in writing.

(5)     Subject to paragraph (2), a teacher may at any time apply in writing to the Management Board to –

(a)     enter into more AVC arrangements; or

(b)     vary or cancel the amount of AVCs deducted under an AVC arrangement.

(6)     In this Article, ‘AVC Arrangement’ means an arrangement under paragraph (1).”.

4        Article 44 substituted

For Article 44 of the 1986 Order there is substituted the following Article –

“44    Refund of contributions

(1)     This Article applies to a teacher, not exceeding the age of 70, who ceases to be employed in reckonable service and who –

(a)     has completed less than 5 years reckonable service;

(b)     is not entitled to the payment of any benefits under Part 3; and

(c)     has not had a transfer value paid in respect of him or her under Article 21 of the Administration Order.

(2)     A teacher to whom this Article applies shall be entitled to a refund of the contributions he or she has paid under this Part during his or her last, or only continuous period of reckonable service.

(3)     The amount of refund to which a teacher is entitled under this Article shall be a sum equal to the aggregate of the contributions referred to in paragraph (2) together with compound interest applied in accordance paragraph (4).

(4)     Compound interest shall be applied at the rate of 3% per annum with yearly rests, from the first day of the financial year following that to which they were attributable under the provisions in force at the time they were paid, until the date of calculation.

(5)     If a teacher entitled to a refund under this Article applies for that refund in accordance with Article 50 but dies before his or her refund is paid, the Management Board must pay the sum due –

(a)     to the teacher’s legal personal representatives; or

(b)     if that sum does not exceed £5000, in accordance with Article 85.”.

5        Articles 45 to 49 revoked

Articles 45 to 49 of the 1986 Order are revoked.

6        Articles 59A and 59B substituted

For Articles 59A and 59B of the 1986 Order there are substituted the following Articles –

“59A Conversion of benefits into lump sum not exceeding £30,000

(1)     A teacher, including a former teacher, may apply to the Management Board to receive a lump sum by way of exchange of the capital value of all his or her accrued benefits payable out of the Fund, provided that at the time the application is made –

(a)     the teacher has attained the age of 60;

(b)     the teacher has not commenced drawing his or her accrued benefits; and

(c)     the aggregate of the following amounts does not exceed £30,000 –

(i)      the capital value of the teacher’s accrued benefits,

(ii)      all lump sums that the teacher has previously exchanged –

(A)    under Article 131CE of the Income Tax Law, or

(B)     before 1st January 2015 under any of the previous trivial commutation provisions referred to in Article 131CE(2) of the Income Tax Law, that were in force before that date.

(2)     An exchange under paragraph (1) is not permitted where the capital value of the teacher’s accrued benefits includes any amount transferred from a scheme, trust or contract (however called and whether approved under any Article of the Income Tax Law or under the jurisdiction of a country or territory outside Jersey).

(3)     An application under paragraph (1) shall be made in such form and manner as the Management Board may specify.

(4)     The calculation of the lump sum payable under this Article shall be determined by the Management Board after consulting the Actuary.

(5)     Payment of the lump sum shall –

(a)     in the case of –

(i)      a teacher, be due on the day after the teacher ceases to be employed in reckonable service, or

(ii)      a former teacher, be made within 3 months following the date of the application under paragraph (1); and

(b)     extinguish the teacher’s rights to any other benefits payable out of the fund, as well as the rights of any person contingently entitled to any benefit payable upon that teacher’s death.

(6)     In this Article ‘former teacher’ means a teacher who has ceased to be employed in reckonable service (other than by reason of retirement).

59B   Former teacher – conversion of benefits into lump sum not exceeding £18,000

(1)     A teacher who ceases to be employed in reckonable service (other than by reason of retirement) may apply to the Management Board to receive a lump sum by way of exchange of the capital value of all of his or her accrued benefits payable out of the Fund provided that at the time the application is made –

(a)     the teacher’s benefits have not become payable;

(b)     the teacher’s employer is not making any contributions on his or her behalf to another approved Jersey scheme; and

(c)     the value of the teacher’s benefits does not exceed £18,000.

(2)     An exchange under paragraph (1) is not permitted where the capital value of the teacher’s benefits includes any amount transferred from a scheme, trust or contract (however called and whether approved under any Article of the Income Tax Law or under the jurisdiction of a country or territory outside Jersey).

(3)     An application under paragraph (1) shall be made in such form and manner as the Management Board may specify.

(4)     The calculation of the lump sum payable under this Article shall be determined by the Management Board after consulting the Actuary.

(5)     Payment of the lump sum shall extinguish the teacher’s rights to any other benefits payable out of the Fund, as well as the rights of any person contingently entitled to any benefit payable upon the teacher’s death.

(6)     In paragraph (1)(b) ‘approved Jersey scheme’ has the meaning given in Article 130 of the Income Tax Law.”.

part 2

amendments to the teachers’ superannuation (New members) (jersey) Order 2007

7        Interpretation

In this Part “2007 Order” means the Teachers’ Superannuation (New Members) (Jersey) Order 2007[4].

8        Article 7 amended

In Article 7 of the 2007 Order, for paragraphs (1) and (2) there are substituted the following paragraphs –

“(1)    Subject to this Order, a full-time employee who is an eligible employee shall be a member of the scheme.

(2)     Subject to this Order, a part-time employee who is an eligible employee shall be a member of the scheme if he or she elects to become a member of the scheme.”.

9        Article 8 amended

In Article 8(3)(b) of the 2007 Order –

(a)     for clause (i) there is substituted the following clause –

“(i)     elected to receive, received, nor is due to receive a refund of his or her contributions to the scheme under Article 22, or”;

(b)     clause (ii) is deleted; and

(c)     clause (iii) is re-numbered as clause “(ii)”.

10      Article 12 substituted

For Article 12 of the 2007 Order there is substituted the following Article –

“12    Additional voluntary contributions

(1)     A member may apply to the Management Board to enter into an arrangement to pay additional voluntary contributions (‘AVCs’) to the fund, in order to be entitled to such added years as the Management Board, on the advice of the Actuary, shall decide.

(2)     The payment of AVCs shall be subject to such minimum and maximum amounts as the Management Board, on the advice of the Actuary, may determine and shall be calculated on the basis that there must be no actuarial cost to the fund.

(3)     An application under paragraph (1) must be made in such manner as the Management Board requires and must specify whether the AVCs will be by way of –

(a)     a single payment deducted from the member’s annual salary by a specified monthly amount; or

(b)     a periodic payment of a fixed percentage, or specified amount of salary deducted from the member’s monthly salary.

(4)     If at any time, as a result of actuarial advice, any change occurs or is likely to occur in respect of an amount determined under paragraph (2), the Management Board shall notify the member accordingly, in writing.

(5)     Subject to paragraph (2), a member may at any time apply in writing to the Management Board to –

(a)     enter into more AVC arrangements; or

(b)     vary or cancel the amount of AVCs deducted under an AVC arrangement.

(6)     This paragraph applies where a member has been paying AVCs in accordance with Article 12 as it was in force immediately before the coming into force of the Teachers’ Superannuation (Miscellaneous Amendments) (Jersey) Order 2016[5].

(7)     Where paragraph (6) applies –

(a)     the member may continue to pay AVCs in accordance with Article 12 as it was in force immediately before the coming into force of the Order referred to in paragraph (6);

(b)     subject to paragraph (2), the member may also enter into an AVC arrangement; and

(c)     if the member ceases to be an employee before normal retiring age, the number of years added by virtue of AVCs made by way of periodical payments under Article 12(3)(b) as it was in force immediately before the coming into force of the Order referred to in paragraph (6), shall be reduced so that –

(i)      in the case of a member who commenced paying AVCs on or after 6th December 2013, the number of years added in respect of those contributions shall be the sum of –

the total amount of added years which the member would have been entitled to by virtue of the periodical payments had he or she continued to pay them, and remained in employment up to normal retiring age

x

the period over which the member paid the periodical payments

the period over which the member would have paid the periodical payments had he or she remained in employment and continued to pay them up to normal retiring age;

and

(ii)      in the case of a member who commenced paying AVCs before 6th December 2013, the number of years added in respect of those contributions shall be the greater of –

(A)    the number of years calculated in accordance with clause (i), or

(B)     the number of years calculated by the Actuary as being the value of the contributions paid by and in respect of the member that equate to the value of the additional benefits arising from the reduced added years.

(8)     In this Article, ‘AVC Arrangement’ means an arrangement under paragraph (1).”.

11      Articles 20 and 21 substituted

For Articles 20 and 21 of the 2007 Order there are substituted the following Articles –

“20    Entitlement to deferred pension

(1)     Subject to paragraph (2), a member –

(a)     who ceases to be an employee after completing at least 2 years’ qualifying service; and

(b)     who is not entitled to a pension under Article 15, 16 or 17,

shall be entitled to a deferred pension calculated in accordance with Article 15 which, unless paragraph (3) applies, is payable from the date the member attains normal retiring age.

(2)     A member is not entitled to a deferred pension if that member has otherwise made an election under Article 21(4) or Article 22(1A).

(3)     A member entitled to a deferred pension may elect to receive that pension up to 5 years before attaining his or her normal retiring age.

(4)     A member shall make an election under paragraph (3) in such form and manner as the Management Board may specify.

(5)     If a member makes an election under paragraph (3), he or she shall be paid a pension calculated in accordance with Article 15 reduced by a cost neutral percentage for each year (and so in proportion for any part of a year) by which the member’s age at the time when payment of the pension starts, falls short of the member’s normal retiring age.

(6)     In paragraph (5), ‘cost neutral percentage’ means a percentage calculated by the Actuary so as to produce an amount which is not expected to result in additional cost to the Fund or a net contribution to the Fund.

21      Entitlement to transfer value payment

(1)     Subject to paragraph (3), a member who ceases to be an employee and who is not entitled to a pension under Article 15, 16 or 17, shall be entitled to a transfer value, paid in accordance with Article 21 of the Administration Order.

(2)     For the purposes of this Article, a member is not required to complete any period of qualifying service.

(3)     A member is not entitled to a transfer value payment if that member has otherwise made an election under Article 20(3) or Article 22(1A).

(4)     A member who wishes a transfer value to be paid, shall make an election in such form and manner as the Management Board may specify.”.

12      Article 22 amended

(1)     For the heading to Article 22 of the 2007 Order there is substituted the following heading –

“22    Entitlement to refund of contributions”.

(2)     In Article 22 of the 2007 Order –

(a)     before paragraph (1) there are inserted the following paragraphs –

“(A1) Subject to paragraph (AA1), a member who ceases to be an employee after completing less than 5 years’ qualifying service and who is not entitled to a pension under Article 15, 16 or 17, shall be entitled to a refund of his or her contributions to the scheme.

(AA1)        A member is not entitled to a refund of his or her contributions if that member has otherwise made an election under Article 20(3) or Article 21(4).”;

(b)     in paragraph (1), the words “under Article 20(2)(b) or 21(2)(a)” are deleted;

(c)     after paragraph (1) there is inserted the following paragraph –

“(1A) A member shall elect to receive a refund under this Article in such form and manner as the Management Board may specify.”;

(d)     in paragraph (2) –

(i)      in sub-paragraph (c), after the words “9(6);” there is added the word “and”,

(ii)      for sub-paragraph (d) there is substituted the following sub-paragraph –

“(d)    compound interest on the contributions.”,

(iii)     sub-paragraph (e) is deleted;

(e)     in paragraph (3) –

(i)      for the words “paragraph (3)” there are substituted the words “paragraph (2)(d)”,

(ii)      sub-paragraph (d) is deleted and sub-paragraphs (e) and (f) are renumbered as sub-paragraphs “(d)” and “(e)” respectively,

(iii)     in re-numbered sub-paragraph (e) (formerly sub-paragraph (f)), for the words “sub-paragraph (e)” there are substituted the words “sub-paragraph (d)”.

13      Article 33 amended

In Article 33(1) of the 2007 Order, for the word “one-quarter”, there is substituted the word “30%”.

14      Articles 34 and 34A substituted

For Articles 34 and 34A of the 2007 Order there are substituted the following Articles –

“34    Conversion of benefits into lump sum not exceeding £30,000

(1)     A member or deferred pensioner may apply to the Management Board to receive a lump sum by way of exchange of the capital value of all his or her accrued benefits payable under the scheme, provided that at the time the application is made –

(a)     the member or deferred pensioner has attained the age of 60;

(b)     the member or deferred pensioner has not commenced drawing his or her accrued benefits; and

(c)     the aggregate of the following amounts does not exceed £30,000 –

(i)      the capital value of the member’s or deferred pensioner’s accrued benefits,

(ii)      all lump sums that the member or deferred pensioner has previously exchanged –

(A)    under Article 131CE of the Income Tax Law, or

(B)     before 1st January 2015 under any of the previous trivial commutation provisions referred to in Article 131CE(2) of the Income Tax Law, that were in force before that date.

(2)     An exchange under paragraph (1) is not permitted where the capital value of the member’s or deferred pensioner’s accrued benefits includes any amount transferred from a scheme, trust or contract (however called and whether approved under any Article of the Income Tax Law or under the jurisdiction of a country or territory outside Jersey).

(3)     An application under paragraph (1) shall be made in such form and manner as the Management Board may specify.

(4)     The calculation of the lump sum payable under this Article shall be determined by the Management Board after consulting the Actuary.

(5)     Payment of the lump sum shall –

(a)     in the case of –

(i)      a member, be due on the day after the member ceases to be an employee, or

(ii)      a deferred pensioner, be made within 3 months following the date of the application under paragraph (1); and

(b)     extinguish the member’s or deferred pensioner’s rights to any other benefits payable under the scheme, as well as the rights of any person contingently entitled to any benefit payable upon that member’s or deferred pensioner’s death.

34A   Deferred pensioner - conversion of benefits into lump sum not exceeding £18,000

(1)     A deferred pensioner may apply to the Management Board to receive a lump sum by way of exchange of the capital value of all of his or her accrued benefits payable under the scheme provided that at the time the application is made –

(a)     the deferred pensioner’s benefits have not become payable;

(b)     the deferred pensioner’s employer is not making any contributions on his or her behalf to another approved Jersey scheme; and

(c)     the value of the deferred pensioner’s benefits does not exceed £18,000.

(2)     An exchange under paragraph (1) is not permitted where the capital value of the deferred pensioner’s benefits includes any amount transferred from a scheme, trust or contract (however called and whether approved under any Article of the Income Tax Law or under the jurisdiction of a country or territory outside Jersey).

(3)     An application under paragraph (1) shall be made in such form and manner as the Management Board may specify.

(4)     The calculation of the lump sum payable under this Article shall be determined by the Management Board after consulting the Actuary.

(5)     Payment of the lump sum shall extinguish the deferred pensioner’s rights to any other benefits payable under the scheme, as well as the rights of any person contingently entitled to any benefit payable upon the deferred pensioner’s death.

(6)     In paragraph (1)(b) ‘approved Jersey scheme’ has the meaning given in Article 130 of the Income Tax Law.”.

Part 3

Amendments to the teachers’ superannuation (administration) (jersey) Order 2007

15      Interpretation

In this Part “Administration Order” means the Teachers’ Superannuation (Administration) (Jersey) Order 2007[6].

16      Article 1 amended

In Article 1 of the Administration Order –

(a)     after the definition “accepted school” there are inserted the following definitions –

‘approved drawdown contract’ means a contract approved under Article 131D of the Income Tax (Jersey) Law 1961 (the ‘Income Tax Law’);

‘approved Jersey scheme’ has the meaning given in Article 130 of the Income Tax Law;”;

(b)     in the definition “Teachers’ Superannuation Schemes”, after the words “2007” there are added the words “, and ‘relevant Teachers’ Superannuation Scheme’ shall be construed accordingly;”.

17      Article 20 amended

In Article 20 of the Administration Order –

(a)     for paragraph (1)(b) there is substituted the following sub-paragraph –

“(b)    any transfer value is received by the Treasurer in respect of the member under the terms of –

(i)      a personal pension scheme (whether entered into in Jersey, the United Kingdom or elsewhere),

(ii)      an approved Jersey scheme (including another pension scheme administered by or on behalf of the States),

(iii)     a scheme equivalent to the relevant Teachers’ Superannuation Scheme established in the United Kingdom or under the jurisdiction of any country or territory outside Jersey, or

(iv)     an approved drawdown contract, and

referred to in this Article as the ‘transferring arrangement’.”;

(b)     in paragraph (6)(a) for the words “the Social Security Pensions Act 1975 of the United Kingdom” there are substituted the words “the Pensions Schemes Act 1993 (c.48) of the United Kingdom”;

(c)     for paragraphs (8) and (9) there are substituted the following paragraphs –

“(8)    In the case of a United Kingdom transferring arrangement –

(a)     at least 70% of a transferred person’s UK tax-relieved scheme funds must be designated by the Treasurer for the purposes of providing that person with an income for life;

(b)     no payment of a pension (including any lump sum) in respect of the funds designated under sub-paragraph (a), must be made before the day on which a transferred person reaches the age of 55, unless, immediately before he or she becomes entitled to a pension under the relevant Teachers’ Superannuation Scheme, that person ceases employment by reason of ill-health retirement under the ill-health retirement provisions of the relevant Teachers’ Superannuation Scheme;

(c)     the Minister must ascertain whether, under that transferring arrangement, a restriction applies to the refund of the transferred person’s contributions, and if so, a similar restriction must apply under the relevant Teachers’ Superannuation Scheme in relation to that person in respect of those contributions;

(d)     the Minister must ensure that an undertaking to maintain any restriction on the refund of a transferred person’s contributions, is given by the trustees or managers of any arrangement to which a subsequent transfer is made under Article 21.

(9)     The Minister may give such undertakings to the taxation authorities of the United Kingdom or elsewhere, as he or she considers appropriate, in connection with transfer values received under this Article, or the maintenance of any restrictions in relation to the refund of a transferred person’s contributions.”;

(d)     after paragraph (11) there is added the following paragraph –

“(12)  In –

(a)     paragraphs (8) and (9) ‘transferred person’ means a person in respect of whom the Treasurer has, under paragraph (1)(b), received a transfer value under a United Kingdom transferring arrangement;

(b)     paragraph (8)(a) ‘UK tax-relieved scheme funds’ has the meaning given in regulation 2(5) of the Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006 (S.I. 2006/206) of the United Kingdom.”.

18      Article 21 amended

In Article 21 of the Administration Order –

(a)     for paragraph (1), there are substituted the following paragraphs –

“(1)    This Article applies if –

(a)     a member of the scheme under the Teachers’ Superannuation (Existing Members) (Jersey) Order 1986[7] leaves reckonable service within the meaning of that Order; or

(b)     a member of the scheme under the Teachers’ Superannuation (New Members) (Jersey) Order 2007[8] leaves pensionable service within the meaning of that Order.

(1A)   If a member leaves service as referred to in paragraph (1) and –

(a)     subscribes to a personal pension scheme;

(b)     becomes a member of an approved Jersey scheme;

(c)     becomes a member of a scheme equivalent to the relevant Teachers’ Superannuation Scheme established outside Jersey; or

(d)     enters into an approved drawdown contract,

provided that member’s retirement benefits have not come into payment, the Treasurer may pay in respect of that member a transfer value to the trustees or managers of the scheme or contract in question.”;

(b)     in paragraph (3), for the words “paragraphs (1) and (2)” there are substituted the words “paragraphs (1) to (2)”;

(c)     for paragraph (4) there is substituted the following paragraph –

“(4)    Where a transfer payment is paid out of the Fund under this Article, that payment extinguishes the member’s rights to any other benefits under the relevant Teachers’ Superannuation Scheme, as well as the rights of any person contingently entitled to any benefit payable upon that member’s death.”.

Part 4

closing

19      Citation and commencement

This Order may be cited as the Teachers’ Superannuation (Miscellaneous Amendments) (Jersey) Order 2016 and shall come into force 7 days after the day it is made.

senator i.j. gorst

Chief Minister

 


 



[1]                                    chapter 16.850

[2]                                    chapter 16.850.60

[3]                                    R&O.130/2016

[4]                                    chapter 16.850.70

[5]                                    R&O.130/2016

[6]                                    chapter 16.850.05

[7]                                    chapter 16.850.60

[8]                                    chapter 16.850.70


Page Last Updated: 06 Jan 2017