Current status: Answered by Ivan McKee on 23 May 2024
To ask the Scottish Government how the Scottish Teachers' Pension Scheme (STPS) pension benefit structure, including accrual rate and lump sum, compares to other defined benefit pension schemes.
The Teachers’ Pension arrangement in Scotland comprises of two schemes. The Scottish Teachers’ Superannuation Scheme (STSS) which is the legacy scheme and which closed to all members on 31 March 2022, and the reformed Scottish Teachers’ Pension Scheme 2015 (STPS).
The STSS is a final salary scheme and has a normal pension age (NPA) of 60 for members who joined prior to 1 April 2007 and a NPA of 65 for members who joined on or after 1 April 2007. For members with a NPA of 60, the accrual rate is 1/80 th of the members final salary for every year of pensionable service, there is also an automatic tax-free lump sum payable of 3/80ths. For those with a NPA of 65, the accrual rate is 1/60 th and there is no automatic lump sum. However, members have the option to give up pension for a tax-free lump sum at retirement.
In the STPS, benefits accrue on a Career Average Revalued Earnings (CARE) basis and NPA is linked to State Pension Age. The accrual rate is 1/57 th of the member’s pensionable earnings each year. There is no automatic lump sum but members have the option to give up pension for a tax-free lump sum at retirement.
The pension benefits structure in the STPS is broadly comparable with the main UK public service pension schemes which are all based on Career Average Revalued Earnings. Apart from the uniformed public services, all schemes have a normal pension age linked to State Pension age. `