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The Scottish Teachers’ Pension Scheme (STPS) continues to be an integral part of the remuneration package for teachers in Scotland. A Defined Benefit scheme, it offers the security of a guaranteed income in every year of retirement for all its members. Pensions in payment to retired members are inflation proofed and adjusted each April in line with the Consumer Prices Index. In April 2023, pensions increased by 10.1% and in April 2024 by a further 6.7%.

The impact of the recent teacher pay settlement will be taken into account as part of the 2024 scheme actuarial valuation. The valuation measures the costs of the benefits being provided and informs the future contribution rates to be paid by employers in order to ensure sustainability.

The provisions of the Scottish Teachers’ Pension Scheme allow members to adjust their contribution rates and increase their pension benefits by purchasing Additional Pension or opting for Faster Accrual.

Additional Pension is an amount of extra pension which can be bought in multiples of £250 up to a maximum of £7,000 and can be paid for by additional monthly contributions over a period of 1 to 20 years. Faster Accrual allows members to earn pension at a faster rate than the standard accrual of 1/57 th by making extra monthly contributions. There are three faster accrual options: 1/45th, 1/50th and 1/55th.

The Scottish Public Pensions Agency (SPPA) undertakes the role of Scheme Manager of the Scottish Teachers’ Pension Scheme, on behalf of Scottish Ministers. Scheme members can raise any concerns or enquiries with the SPPA by using the Contact Us page at www.pensions.gov.scot/contact-us or by calling the Agency.

The Scottish Teachers’ Pension Scheme (STPS) continues to be an integral part of the remuneration package for teachers in Scotland. A Defined Benefit scheme, it offers the security of a guaranteed income in every year of retirement for all its members. Pensions in payment to retired members are inflation proofed and adjusted each April in line with the Consumer Prices Index. In April 2023, pensions increased by 10.1% and in April 2024 by a further 6.7%.

While Scottish Ministers have executively devolved responsibility for the STPS, they exercise those functions within a reserved framework. The Scottish Ministers must therefore implement policy which reflects UK government primary legislation and any secondary legislation introduced by Scottish Ministers requires HM Treasury approval.

The design of the STPS, including accrual rates and benefits payable from the scheme, are determined by reserved UK Government primary legislation. Scottish Ministers have no powers to vary the accrued benefits payable from the scheme to retired teachers without HM Treasury consent.

The latest Scottish Teachers’ Pension Scheme Annual Report and Accounts show that the average annual pension in payment from the Scheme as at 31 March 2023 was £13,842. In addition, the accounts show that lump sums totalling £133.5 million were paid to 2,723 new retirees in 2022-23, an average lump sum of £49,063.

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. `

Pensions in payment from the Scottish Teachers’ Pension Scheme are protected against inflation and are adjusted each April in line with the Consumer Prices Index. In April 2023, pensions increased by 10.1% and in April 2024 by a further 6.7%.

The projected costs of the Scottish Teachers’ Pension Scheme are assessed and managed as part of the scheme actuarial valuation as directed by the UK Government. The latest quadrennial valuation of the scheme is based on data as at 31 March 2020 and was published on the SPPA website on 14 November 2023. It is available at the following address:

www.pensions.gov.scot/teachers/employers/pension-contribution-rates/valuations

The latest valuation led to an increase in the employer contribution rate from 23% to 26% for the implementation period 2024 to 2027. The rate will be reviewed again at the 2024 scheme valuation, ensuring the sustainability of the Scheme.

While Scottish Ministers have executively devolved responsibility for the Scottish Teachers' Pension Scheme (STPS), occupational pensions policy is reserved to the UK Government and is outside the powers of the Scottish Parliament.

The STPS was last reformed in 2015, as provided for under the Public Service Pensions Act 2013. When the 2013 Act was introduced, the UK Government made a commitment that the reforms would be sustained for 25 years. Therefore, the Scottish Government do not intend to carry out a full review of the scheme in the near future, however, we continue to work closely with the Scottish Teachers’ Pension Scheme Advisory Board who advise Scottish Ministers on the desirability of changes to the design of the Scheme.