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Final salary link break musings

Discussion in 'Retirement' started by Mrsmumbles, Apr 20, 2019.

  1. Mrsmumbles

    Mrsmumbles Star commenter

    Have had a good rummage around the TPS website but wondered if anyone else was in the situation. On a good wage, 19 years full time paid into final salary. Excellent health but 2015 Year Of Horror. The switch to career average 2015. On WRS by May 2015, leave school had worked in many years 31/8/15. Short gap. Start temp part rime school job in November 2015, so two month gap. Left there 31/8/16 and have been self employed ever since. Have not been paying into TPS since 31/8/16. Getting on for 3 years. I had been paying faster accrual from April 2015 but I think it was all written off as the pensionable year I was in essentially nosedived away when I ‘left’ in August 2015. I have hardly anything in the career average pot. But before I left temp job in August 2016, which gave me access to the TPS, I paid in a bit 10k additional one off payment as I had realised that I would probably not be returning and wanted to bump up the monthly future pension an extra grand a year, and the 10k enables this to happen when or if I reach 67. I am still only 47, but if I am going to have to leave teaching and retrain and invest in a SIPP going forward, I want the pit to be the best it is going to be and I trust TPS and the Tories about as much as a Turkey trusts Christmas. So. As a transitional member of TPS, my best years are around 2007-2011 in the final salary scheme. I think the final salary link means that if you stay in teaching, the final pension you get at 67 or whenever is linked back to the final scheme and you get a sort of average. For me, this would be much much lower, due to falling wages and freezes and my career stalling. They won’t pay me the same wage in new advertised posts (have had the whole insulting interview experience of being repeatedly shortlisted and then told I cost too much) and I would be looking at a ten k drop...the temp job was this sort of salary drop and it was seen as a good salary. I was higher before as I built up points and yearly increments and was UPS3.
    As I understand it, If I stay out of schools for five years, it breaks the final salary link. So would that mean that for higher earning transitional members like me, or the delightful ‘Diane’, according to TPS, with my 19 best years in the old scheme, it is better to do the break so I get a better pension from the now-closed final salary scheme at 60? I assume the £10,800 or so which is the entirety of my career average payments between November of 2015-August 2016 would just slowly simmer away untouched in its pot, ready to be paid out later if I ever made it to 67? If I am right, I would then probably slope back on supply or whatever in my early fifties. They don’t make things easy, do they? Anyone else done the Maths and willingly broken their final salary link? What a mess!
  2. tonyuk

    tonyuk Occasional commenter

    I have the same sort of dilemma. I have final salary that I can take at 60 but am back in teaching having broken the link so now in theory I have two schemes running one I can take at 60 and one at 67.
    Intending to retire for a day and take the one at 60 and then return. As you say they don't make it easy.
    Mrsmumbles likes this.
  3. Mrsmumbles

    Mrsmumbles Star commenter

    Hi Tony, thanks for this...so, to break the link you have to be out of the scheme for five years, is it? Gawd it is tricky. I am realising that a bit of oartvtime teaching might help me with my state pension as well, ut the main concern I have is how to protect my best three years in the last ten being averaged down. I think that is what they do. It infuriates me that the a ademy fat cats can expect huge pensikn payouts, while we are scratching our heads on how to play the system to just get enough to live on. If you have any other advice, please post. :)

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