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help in future pension forecast

Discussion in 'Retirement' started by cedars1948, Oct 13, 2019.

  1. artbinki

    artbinki New commenter

    I’m in a similar-ish situation in that I stepped down from the senior role two years ago and have higher salary between 2014 and 2017 so at age 52 now I’m going to have to opt out of the pension at age 56 1/2 otherwise that higher salary will fall off the end of the best 10 years and I will receive less at 60. I’ve tried to calculate it two ways - number one if I opted out
    number two if I don’t opt out how much I will gain by paying the additional 3 1/2 years’ pension ... getting the additional career average pension at 67 and the extra years on the final salary the actual pension in the end works out about the same if I take them separately at 60 and 67. However the lump sum at 60 would be higher. And of course I’m also saving on pension contributions for those 3 1/2 years.
    Despite this my pension is still a lot lower than yours even for 35 years paying in because I work in the north-west where we tend to have lower tlr and lower slt salaries
     
  2. diddydave

    diddydave Established commenter

    I think you may be a little out of date. The court case has gone all the way to the final court and the government lost and although it was specific to the judges and firefighters the government has committed to applying the restitution that will be directed by the employment tribunal with respect to those two pensions to all public sector pensions that followed the same model - including teachers. https://www.teacherspensions.co.uk/members/faqs/valuation/mccloud-case.aspx

    Whilst you do get a reduced pension if you take it early, and I agree that - as it stands - if you take it early you have to take both of them early, it is still worth working out your own specific numbers. The reduction is not an exponential one and because you get it for years (many more in the case of the career average one) you are probably financially better off doing so from the point you take it until you reach your late 70s.
     
  3. diddydave

    diddydave Established commenter

    Hopefully, before you reach 56 1/2, they will have worked out how to adapt the pension scheme to comply with the age discrimination case - but that does mean you'll have to work it all out again! ;)
     
  4. HannahD16

    HannahD16 New commenter

    The court case on 18th December? Is this the employment tribunal which has to make sense of the Mc Cloud/ Firefighters’ judgement?
     
  5. cedars1948

    cedars1948 New commenter

    Thanks again
    I will ask teachers pensions for my last ten years.
    I am thinking of opting out as if it goes down by when i hope to retire next September.
    I am right in thinking that if i opt out then my last ten years would revert back to 08-11
     
  6. diddydave

    diddydave Established commenter

    That's an important question to ask TPS, if you cannot backdate your opt-out to when you re-started your TPS then it may be too late...but bear in mind what phatsals has said.
     
  7. cedars1948

    cedars1948 New commenter

    I will ask that question as April it had my best years as 2008-11 while the October statement said 1/10/09-30/09/12
     
  8. phatsals

    phatsals Established commenter

    Yes, looking at the 'Hypothetical calculation' rule, assuming you haven't returned to a lower paid role, you should get your full pension based on your salary at your 'break in service' 2 years ago.

    I don't think your 10 years salary 'uprated for inflation' would help you with that. You need to actually ask TPS about the rule. I was completely unaware of the it until diddydave referenced it, and so looked up the information. It helped me see and understand quite clearly how my pension figures had been reached - they were nothing like the TPS site. As dd said, they had used the 'hypothetical calculation' and gone back to a previous salary much to my relief. I didn't know this until I actually claimed my pension and the final figures were provided.

    Ring TPS and ask about it.
     
    diddydave likes this.
  9. cedars1948

    cedars1948 New commenter

    This year after the break I have returned a lower paid role and so would be looking back for when i had a higher salary.
     
  10. phatsals

    phatsals Established commenter

    Then as dd said earlier, your recent service would be ignored. Definitely opt out.
     
  11. diddydave

    diddydave Established commenter

    I think it's the tribunal meeting: https://www.fbu.org.uk/news/2019/09/26/date-set-pensions-remedy-hearing but the decision is HOW rather than IF changes are to be made...it also is only specific to the firefighters (not sure when the judges one is) so although the government has promised to apply the same remedy to the other professions it's going to take more time for that to be agreed and work its way through the system. They've also promised that no-one will be worse off than they currently stand.
     
  12. HannahD16

    HannahD16 New commenter

    Thanks diddydave
     
  13. cedars1948

    cedars1948 New commenter

    Thanks again
    Looking at everything I think I will opt out as I won't add much to my career average part if I take it at the end of the year. So my best three years will either be from 2009-2012 or go back to 2008-11. At least if I opt out now I will have an idea what my pension will be.
     
  14. wayside34

    wayside34 New commenter

    I took a severance age 58 and did some supply teaching from 58 till 60 and took my final salary teachers pension at 60. I was re-rolled into final salary scheme whilst doing supply teaching but my amount to receive went down month by month. I contacted the call centre and go mixed message I opted out and was awarded my best of last 10 years. I complained to teachers pension about mixed messages from staff. Below is a portion of the reply with respect to hypothetical calculation.I have not included the example as they are personal hope this may help.


    Hypothetical calculations
    This type of calculation takes place where there is a break in pensionable employment. In most cases the hypothetical calculation uses the total reckonable service at retirement but with the average salary calculated up to the date of the break. PI is then applied to the retirement benefits. The result is compared to the normal calculation which uses the total reckonable service and the average salary at retirement. The most beneficial is put into payment, but if the final salary at the break is higher than at retirement, only the reckonable service up to the break is used.
    I must emphasise that this type of calculation is only carried out at retirement at which point the service record is up to date and the relevant PI factors can be applied. It is not a calculation which can be carried out by our Contact Centre. However, in light of your concerns, I have given an example below of how a hypothetical calculation may apply to you.
     
  15. diddydave

    diddydave Established commenter

    Unfortunately as your supply pay was probably lower it sounds as though you could well be one of those who are not counted amongst the 'most'. So whilst the hypothetical calculation did protect your pension as it was when you were 58 you were, until you opted out, paying pension contributions that were gaining you no extra benefit.

    Also, if you had gone straight into full-time supply work you would have had no break in service and those two years would have seen your pension continue to go down - and you would have been paying into the pension for that privilege.
     
    wayside34 likes this.

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