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 –
(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
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x
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the period over which the member paid the periodical payments
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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;
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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 –
(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 –
(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