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Going part time-pension impact

Discussion in 'Retirement' started by san38, Jan 10, 2016.

  1. san38

    san38 New commenter

    Probably I'm being a bit thick, but at the age of 53 the retirement plan is not so far from my thoughts&I have always planned to leave at 60. However, long story, lack of curriculum hours&other issues are making goin g part time (3/4 days) also an option. In simple terms how drastically would this impact my pension? If it is final salary (&I think the majority of my pension will be based on final salary?) would this make my final salary the part time one? Could I even be better to stay on as full time but go earlier? Grateful for any advice, a bit clueless on whole system
     
  2. mrkeys

    mrkeys Occasional commenter

    For a long time the pension was based on best 3 consecutive years in the last 10.
    That is changing to average salary. But it is phased.
    You must contact TPS for the correct advice.
     
    ScotSEN and lindenlea like this.
  3. ScotSEN

    ScotSEN Senior commenter

    Does your Union have a financial advisor? If yes they are worth talking to as they usually have a good handle on teachers pensions. Some of the finer points are different from other public sector staff.
     
  4. san38

    san38 New commenter

    Thanks very much both - I had suspected that I needed to get in the financial advice people - hate the sort of 'hard sell' aspect of all finance - hadn't even thought of going via the union so thank you for that idea
     
  5. lizziescat

    lizziescat Star commenter

    A standard IFA may not have the detailed understanding of teachers pension scheme you need.
    I have found the TPS to be helpful in the finer details and as others have said given the new pension scheme you need to check how/if it affects you.
     
    emerald52 likes this.
  6. san38

    san38 New commenter

    Thank you Lizzie - have you spoken to them direct? My only experience has been via email which was dire!
     
  7. lindenlea

    lindenlea Star commenter

    People usually find phone calls to TPS helpful.
     
  8. lizziescat

    lizziescat Star commenter

    I have both e mailed and spoken over the phone. I found speaking directly with them better partly because I could explain exactly what I was asking, double check, if necessary by re phrasing the question, that they had understood my specific point and then check that that I had understood their answer by paraphrasing it back to them. (I think it must be the teacher in me;))
     
  9. wanet

    wanet Star commenter

    Have you read what is on their site?
    As I read it, your best 3 years of the last 10 would count. If you go part-time and have 7 years left before you retire that would be based upon the last 3 years, corrected for inflation. It might be that you would want to take part of it at 55, this would be reduced due to taking it earlier. However, if your salary hasn't increased the value of it increased by inflation might mean that you wouldn't loose that much. Not sure if TPS are allowed to tell you this, but you could use their planner to run senarios. When I planned to retire i did put numbers into a spreadsheet to see different situations.
     
  10. Dunteachin

    Dunteachin Star commenter

    I can't even begin to work out how this was calculated but I taught from 1977 until 2010 with a five year break for family. I retired at 55 and got an ARB pension totalling only 20 years service. This was because I worked part time for around 30 years. It's to do with days in/days out, I think.
    So, yes, going part time will affect your pension and TPS are the people to speak to.
     
    emerald52 likes this.
  11. chipsfortea

    chipsfortea New commenter

    I am in same position.
    As I understand it your pension will be based on best three consecutive years in last 10 BUT you won't accrue 1/80th per year worked when part time, only the pro rata percentage of the 1/80th so your final pension will be less as you won't be accruing a full year per year worked from now on. If you work 50% of week you'll only earn another 3.5 years not the full 7 between 53 and 60 so instead of getting 40/80th of your salary you'll get 36.5/80th.
     
  12. emerald52

    emerald52 Star commenter

    Exactly! It wouldn't be fair if someone working one day a week for 40 years got the same as someone working 5 days a week for 40 years. Many are unaware of the huge impact on pensions of going part time. I'm always amazed by teachers who complain about paying into the pension scheme. They don't understand what a good deal it is.
     
    Startedin82 and lindenlea like this.
  13. Dunteachin

    Dunteachin Star commenter

    Thanks, chips. I knew someone would come along and explain the part time calculation!
    I think I was very lucky. All those years ago, my LEA wrote to me to confirm that I had elected to go part time and still pay into TPS. I have a feeling some part time teachers inadvertently opted out of the scheme or weren't aware they could be in it.
     
    Lindaseymour likes this.
  14. applecrumblebumble

    applecrumblebumble Lead commenter

    chipsfortea spot on and the likelihood of any significant pay rise in the next 3-4 years is not going to increase you 'best 3 consecutive years'.
     
  15. elw01

    elw01 New commenter

    Part-time employment
    Can any one tell me how they work out "days out" I need to check they are correct but don't know how?
     
  16. binaryhex

    binaryhex Lead commenter

    The first step is to ring up the TPS and ask them to send you a year-by-year breakdown of your pension history. This is so you can check a) that they have included all of your employment and b) so you know what your best three consecutive year are.

    Each year in your pension history gets adjusted upwards. This is by a fixed percentage that is to do with what inflation / RPI / CPI was in each particular year. Some years get added to every year by quite a hefty sum, as in 2008. Some years get added to by next to nothing, as in most recent years. Many people today in 2018 are finding out by looking at the history TPS sends them that their best three years are indeed around 2008 (10 years ago), and so their pension re-evaluation has been going up a lot every year. However, they also realise that if they keep working, the 2008 figure (and other years around then) will quickly drop out of their pension calculation because it's not in the last 10 years - and your best 3 consecutive years in the last 10 are being adjusted upwards each year by next to nothing!

    Why is that important now? It may mean that if you keep working and contributing to your current pension, the amount you receive is actually less not more than if you opt out of the TPS, even though you are accruing more years! The extra pension you would get by adding an extra year is less than the amount your pension would have gone up by, if you still had that 2008 year in the calculation.

    What all this means is that you have to look carefully at the years that count towards your pension, and how much each year is adjusted by. Some people work out that it is better to take their pension early then start a new one. Others opt out of the TPS to preserve their best years, and start a private pension.

    It is also worth searching for Government Gateway and jumping through all the hoops to sign up. You can then see all your NI contributions since you were 16 and get an accurate estimate of your state pension and the date you can get it. You'll be able to see if it's worth making more contributions.
     
    emerald52 likes this.
  17. mjfp509

    mjfp509 New commenter

    You don't even need to phone the TPS for your employment history, days out, salaries, etc. If you register your details on their site, it is all listed there, as well as your current best 3 years from the last 10.
     
    wanet likes this.
  18. Lindaseymour

    Lindaseymour New commenter

    Hi Dunteachin. I've just realised that I'm in this position - went part-time in 1999 but was unaware I had to opt back into TPS and hence lost 2 years pension. You mention that your LEA wrote to you to confirm this. I'm sure mine didn't. Can you recall when that was please? I'm about to pursure a claim but need to gather as much info as I can.
     
  19. Dunteachin

    Dunteachin Star commenter

    It was about 1988. I remember ringing them and saying that I'm going part time and asking whether it would affect pension contributions. I don't know what made me think of doing that, but thank God I did! I then got a letter confirming my part time election and my desire to continue paying into the TPS. I still have the letter.

    My call might have been triggered by seeing my first part-time pay slip, and realising that superann hadn't been deducted. I'm not sure if they contacted me first, tbh.
     
    Lara mfl 05 likes this.
  20. Sundaytrekker

    Sundaytrekker Star commenter

    My memory is that part timers were not allowed to contribute to TPS then the rules changed but you had to opt in. I was aware of this for some time before I opted in in 1992. So Dunty’s dates sound about right. I think I had to be proactive in finding out about it.
     
    Dunteachin likes this.

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