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Scottish Ministerial Code
10. MINISTERIAL PENSIONS
Participation in the Scottish Parliamentary Pension Scheme
10.1 Pensions benefits are available to Ministers within the Scottish Parliamentary Pension Scheme (SPPS) unless they actively opt-out. For all practical purposes, Ministers' benefits are treated as having two independent components. The first is in respect of their salary and service as a MSP (and is the same as for any other MSP). The second is in respect of their Ministerial salary and service.
10.2 SPPS provides benefits for Members of the Scottish Parliament and Ministers. The Scheme is administered by the Scottish Public Pensions Agency (SPPA), 7 Tweedside Park, Tweedbank, Galashiels, TD1 3TE. Detailed guidance, explaining the main provisions of the scheme, is available from them on request. Further information about the Scheme can also be obtained by telephoning SPPA on 01896 893078.
10.3 Ministers who have accrued pension rights in another pension scheme may, if they participate in SPPA in respect of their Ministerial salary, and if the rules of the other scheme permit, elect to have the value of those accrued rights transferred to the Scheme. The Scottish Public Pensions Agency, who administer the scheme on behalf of the Scottish Parliamentary Corporate Body will advise on the additional benefits which would be secured by such a transfer payment.
Participation in other Pension Schemes
10.4 Ministers with accrued pension rights in another pension scheme (including those secured by an insurance policy) who do not (or cannot) elect for a transfer payment may leave these as "frozen" rights in the other scheme, with no further contributions being payable during their tenure of office. It is perfectly acceptable to retain the right to resume membership or the payment of premiums on leaving SPPS.
10.5 Ministers who expect to resume their former employment on ceasing to hold Ministerial office and who elect not to participate in SPPS may remain in active membership (that is, with continued payments of contributions, and with their period of office counting as continued pensionable employment) of any pension scheme relating to that employment provided that this can be done under the rules of the scheme. In these circumstances the continued contributions may be paid by the Minister alone, or by the former employer alone, or jointly, depending on the rules of the other scheme.
10.6 It must be emphasised that any arrangements made under paragraphs 10.4 and 10.5 must not go outside the terms of the particular pension scheme. There would be no objection to a general alteration of the rules of a scheme when this is necessary to permit such arrangements; but it would not be appropriate for there to be added to the scheme a special provision relating only to the tenure of a Ministerial Office. If Ministers have any doubts about the propriety of any arrangements they intend making, they should consult the First Minister.
10.7 Ministers who elect not to participate in SPPS in respect of their Ministerial salary, and who make no arrangements of the kind set out in paragraph 10.5, may be entitled to claim tax relief on premiums paid or continued under an insurance policy (normally a retirement annuity contract or personal pension scheme) to provide additional pension etc benefits for themselves or to provide benefits for their families in the event of death. Such contracts are issued subject to the limitations and conditions laid down in the Tax Acts.
10.8 The taxation effects of arrangements such as are mentioned in the paragraphs above may vary according to a Minister's particular circumstances. The Officer-in-Charge, Inland Revenue, Edinburgh Holyrood Tax Office (Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH, Tel No. 0131 473 4190) will explain the effects for tax purposes of any proposed arrangements under paragraph 10.6; the officer-in-charge will also give, on request, further information on the legislation relating to, and the reliefs available in respect of, retirement annuity contracts or personal pension schemes.
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