Guidance For Scottish Teachers Employers on the 2021/22 I.A.S. 19 Employee Benefits – Disclosure Requirements Preparing your annual accounts disclosure

Preparing your annual accounts disclosure

The following suggested text has been produced to help you with disclosures in your annual report and accounts for multi-employer plans (as described in IAS19, paragraph 148). Your participation in the scheme (see point d) section (v) below) can be shown by calculating your proportion of the total employer contributions made to the scheme.

To help with your calculation, note that the total employer contributions received for the Scottish Teachers’ Pension Scheme in the year to 31 March 2023 were £706.5 million (see note 3 in the pension scheme accounts). Contributions collected in the year to 31 March 2024 will be published in October 2024.

Suggested text

“IAS 19 - Employee Benefits paragraph 148 - Multi-employer plans

(a) The (name of body) participates in the Scottish Teachers’ Superannuation Scheme. The scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and from those current employees who are members of the scheme and paying contributions at progressively higher marginal rates based on pensionable pay, as specified in the regulations. The rate of employer contributions is set with reference to a funding valuation undertaken by the scheme actuary. The 2016 valuation set employer contribution rates at 23.0% from 1 September 2019 until 31 March 2023, although the UK Government has since stated that the rates would continue until 31 March 2024. Member contributions continued at the same rates within a range of 7.2% to 11.9% and are anticipated to deliver a yield of 9.4%.

(b) (name of body) has no liability for other employers’ obligations to the multi-employer scheme.

(c) As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the scheme or withdrawal from the scheme

(i) The scheme is an unfunded multi-employer defined benefit scheme.

(ii) It is accepted that the scheme can be treated for accounting purposes as a defined contribution scheme in circumstances where the (name of body) is unable to identify its share of the underlying assets and liabilities of the scheme.

(iii) The employer contribution rate for the period from 1 April 2022 is 23% of pensionable pay. The employee rate applied is variable and is anticipated to provide a yield of 9.4% of pensionable pay.

(iv) While a valuation was carried out as at 31 March 2016, it is not possible to say what deficit or surplus may affect future contributions. Work on the valuation was suspended by the UK Government pending the decision from the Court of Appeal (McCloud (Judiciary scheme)/Sargeant (Firefighters’ Scheme) cases) that held that the transitional protections provided as part of the 2015 reforms was unlawfully discriminated on the grounds of age. Following consultation and an announcement in February 2021 on proposals to remedy the discrimination, the UK Government confirmed that the cost control element of the 2016 valuations could be completed. The UK Government has also asked the Government Actuary to review whether, and to what extent, the cost control mechanism is meeting its original objectives. The 2020 actuarial valuations will take the report’s findings into account. The interim report is complete (restricted) and is currently being finalised with a consultation. Alongside these announcements, the UK Government confirmed that current employer contribution rates would stay in force until 1 April 2024.

(v) (name of body)’s level of participation in the scheme is x% based on the proportion of employer contributions paid in 2022-23.
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