Winding down scheme for STSS members
The 'winding down scheme' is a phased retirement option for members of the Scottish Teachers' Superannuation Scheme who are approaching retirement. It offers the opportunity to continue in employment on a part time basis whilst protecting your overall final retirement pension entitlement.
To apply to take part in the Winding Down scheme you must have attained the age of:
- 56 if your normal pension age is 60 or
- 61 if your normal pension age is 65
You must also have a minimum of 25 years teaching service (for example, you must have had a contract to teach for at least 25 years) of which, the last 10 years must have been full-time service. A credit of up to 5 years for a break, or breaks, in service will count as qualifying service only (not for the calculation of benefits). Please note only teaching service counts. If for example you had transferred in service from the Local Government Superannuation Scheme, this service does not count towards the 25 years required. However service transferred from one of the other statutory teachers schemes would. Service previously refunded from the STSS would also count for qualifying purposes only.
Your winding down employment must be part-time service which is equal to or more than 0.5 full-time equivalent. Winding down employment allows each year of service under the part-time contract to count as one full year for pension benefit calculation purposes.
When winding down your full-time service equivalent contributable salary rate can't be less than the teacher's salary rate prior to commencing the winding down employment.
The final pensionable salary, for benefit calculation purposes, will be the salary that you received in the 365 days prior to entering winding down employment, index-linked to the actual point of retirement.
This may not be the most beneficial as the index linked winding down salary may not provide a pension equal to or better than a pension based on similar part-time service and using the average of the best 3 out of the last 10 years’ salary.
The following do not count as teaching service:
- previously purchased Past Added Years or Current Added Years (unless you were employed in a school or in an educational role supervising teachers outside the UK)
- transfers in, unless from another Teachers’ pension scheme (for example, England and Wales, Northern Ireland, Guernsey, Jersey, Isle of Man or elsewhere outside the UK)
- the purchase of Additional Pension
The contributions both you and your employer pay are based on the actual salary you receive for the part-time post.
Duration of election
It is only possible to remain in winding down employment for a maximum of 4 years and you must retire at the end of this period although you can retire before the end of the 4 year period.
If you return to full time teaching, it is not be possible to retain the full time service credit awarded whilst you were in winding down employment.
Making an election
A winding down election can only be made with the consent of the employer concerned.
If you wish to make an election, you should complete the form which must be completed by you and your employer's payroll or HR department and forwarded to us within 6 months of the election date.
It should be noted that SPPA only holds records relating to service which is pensionable in the Scottish Teachers Superannuation Scheme. If you have periods of Teaching Employment where you did not contribute to the STSS you'll be required to provide evidence to support this. This information should contain dates, duration of employment, payslips or other forms of supporting evidence.
SPPA will determine eligibility to wind down in all cases and will advise the employer and employee accordingly. You should ensure you’ve received confirmation of your eligibility to wind down prior to commencing your reduction in hours.
A teacher can lose the service credit for winding down if they:
- return to full time employment
- exceed the 4 years maximum period
- work less than a 0.5 contract
- revoke their election in writing
Where you cease to be in winding down employment and return to teaching, the service credit during the period of winding down employment will be removed and the service will revert to the part-time hours worked.
You should consider taking independent financial advice prior to entering winding down employment as once the pension is in payment it cannot be revoked. You may also wish to request an estimate of benefits from SPPA to find out if your winding down election is still more beneficial as it may be in your best interests to revoke your winding down election prior to applying for retirement benefits.