Adjustment to Scottish Teachers Pension Scheme: FOI release

Information requested

You asked for the following in relation to GMP Reconciliation:
1. How many retired teaching staff were notified of an overpayment to their pension, due to incorrect GMP information, making annual cost of living rises too high, in 2021?

2.a What was the main areas of employment of the teaching staff affected?

2.b When was this alleged error discovered? When did the HMRC exercise take place?

3. How many years, on average, does this error go back to for most retirees affected?

4. In the total number of staff affected by this error what is the gender breakdown, what is the age range of those affected and the average age overall?

5. It is understood that the management of this pension scheme was contracted out. When did this happen and what is the name/names of the contractor/contractors?

6. Is it expected that more retired staff are still to be notified of a pension reduction due to this error?

Response

1. 3039

2. While our aim is to provide information whenever possible, in this instance the SPPA does not have this information you have requested. This is because employers don’t send SPPA information about people’s job roles as this is not relevant to the calculation of pensions.

2b. The reconciliation of data was a long term project being carried out by all UK occupational pension schemes brought about by the change in State Pension rules from 6 April 2016. Schemes were required to reconcile data to ensure the correct occupational and state pensions were in payment. The reconciliation of the Teachers data with HMRC commenced on 5th January 2018, when the SPPA contracting out data was sent to HMRC. SPPA were provided with the results of the reconciliation on 23 August 2021.

3. This error relates to pensions for retired Teachers who reached State Pension age between 6 April 2009 and 5 April 2016.

4. The age range is from 68 to 84 and the average age figure is 72. Gender breakdown is 2032 female, 1007 male.

5. Under the old State Pension rules, provided by the Social Security Pensions Act 1975, an employee would “contract out” of the additional State Pension when they were a member of an occupational pension scheme. In return, both employee and employer paid less National Insurance (NI) contributions. The ‘Contracted Out Deduction’ the UK Government introduced contracted out schemes from April 1978 as part of the arrangements for the State Earnings-Related Pension Scheme (SERPS) in order to avoid duplication with the well-developed defined benefit occupational pension scheme sector at that time. As part of that policy, public service schemes were contracted out from that date. This would have been a decision taken by UK Government Ministers at that time. Both sponsoring employers of contracted-out schemes and their employees were able to save on their National Insurance contributions in recognition of the fact that they were accruing equivalent benefits through an occupational pension scheme.

6. A further 201 retired Teachers pensioner records are to be examined in more detail to check if they will be affected.

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