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How is revalued Salary B calculated by the TPS?

Discussion in 'Retirement' started by steveroberts61, Mar 4, 2018.

  1. steveroberts61

    steveroberts61 New commenter

    Hi. I am a protected member of the TPS and I am thinking of retiring December this year. My final salary figure is now changed every month when I go online and my best 3 years average salary (revalued method B) are now between Feb 2008 and Feb 2011. My best actually went down 2 months ago but is now up by over a £1000. It is a difference of around £500 per year on my pension. I have looked at the CPI figures between those dates and averaged those rates, but it does not work out.
    So I have a dilemma. Because my best salary seems to be changing monthly (up and down). How can I accurately predict my best final salary and therefore the best month to retire?
    I have noticed that the CPI rate for Nov 2011 Peaks. So would it be better to go in November?
    Steve
     
    richest1 likes this.
  2. emerald52

    emerald52 Star commenter

    It's because inflation went up. So look at inflation figures.
     
  3. steveroberts61

    steveroberts61 New commenter

    Thanks Emerald52, but how is it worked out? It is now changing monthly so is it worked on CPI figures averaged between Feb 08 and Feb 11 +1.6%. Although I have tried this and it does not work out.
    Because I am thinking of retiring around December this year I want to squeeze as much dosh as possible and my predicted pension has changed by £500/year in a couple of months.
     
    Last edited by a moderator: Mar 5, 2018
  4. phatsals

    phatsals Occasional commenter

    You really need an up to date print out from TPS of your last 10 years salary uprated for inflation. There should be an uplift after April for last years CPI, but earlier years were much more beneficial. Unfortunately they are dropping off which is why you saw your 'Average Salary' figure drop.

    It is only when you have these figures that you can sensibly make a decision.
     
    steveroberts61 likes this.
  5. Dorsetdreams

    Dorsetdreams Occasional commenter

    No, the November figure isn't relevant......

    https://www.teacherspensions.co.uk/updates


    Pensions Increase Rates

    The Pensions Increase rate applicable to pensions in payment or the revaluation of certain scheme benefits or deferred final average salary calculations are applied in April, and are based on the rate of Consumer Prices Index (CPI) in the year to the preceding September. As the Pensions (Increase) Act 1971 doesn’t provide for a decrease in the rate of public service pensions a negative CPI rate will result in a Pensions Increase rate of 0%.

    Year Pensions Increase Rate

    2018/2019 = 3.0%
    2017/2018 = 1.0%
    2016/2017 = 0.0%
    2015/2016 = 1.2%
    2014/2015 = 2.7%
    2013/2014 = 2.2%
    2012/2013 = 5.2%
    ....and you can find the older figures here:

    http://webarchive.nationalarchives....ury.gov.uk/tax_pensions_increases_archive.htm







     
    steveroberts61 likes this.
  6. Dorsetdreams

    Dorsetdreams Occasional commenter

    Here are the historic rates, dug out of the archive (URL above):

    2018/2019 = 3.0% Applied in April 2018
    2017/2018 = 1.0%
    2016/2017 = 0.0%
    2015/2016 = 1.2%
    2014/2015 = 2.7%
    2013/2014 = 2.2%
    2012/2013 = 5.2%
    2011/2012 = 3.1%
    2010/2011 = 0.0%
    2009/2010 = 5.0%
    2008/2009 = 3.9%
    2007/2008 = 3.6% Applied 9 April 2007.

    So, when to opt out, assuming you've been on a static salary for the last decade?

    I'm guessing here. It seems to me that calculating one's 'best 10' adjusted years should include 9 inflation adjustments, and that the OP should therefore opt out/retire before this April in order to get that 5% year in the calculation.

    I'd love someone to jump in here and confirm my guess or correct me if I'm wrong.
     
  7. steveroberts61

    steveroberts61 New commenter

    Thanks Dorsetdreams. Is RPI used before 2012 or CPI? and do I add 1.6% to the figure or is this only for career average members.
    Cheers Steve
     
  8. steveroberts61

    steveroberts61 New commenter

    Sorry Dorsetdreams. I replied before I saw your next post.
     
  9. Dorsetdreams

    Dorsetdreams Occasional commenter

    Hi Steve,

    I'm not sure when the RPI to CPI change occurred but I am confident that the figures above are those which apply in the years given.

    These figures are for the revaluation of our previous years, in calculating our 'final salary'. You described yourself as a protected member. In this case your final salary is all you have. As you know, the whole +1.6% thing is part of the 'average salary' scheme and does not apply to you.

    Keeping your screenshots was a great idea, but it does say somewhere on the statements that the figures are not to be trusted, so you can't hold them to any inconsistencies.

    Sadly it is quite possible that your 'final salary' will drop as the high inflation years fall out of your best 3 in 10.

    Maybe you could ask TP to give you an accurate 'final salary' figure for now, and another for next December. If you do, please post back and let us know how much it changes.

    You might find that you are better off exiting the scheme now, even though you intend to keep teaching until December. Please do let us know what you find....
     
    emerald52 likes this.
  10. heldon

    heldon Occasional commenter

    The 2009/10 5% number will drop out of the calculation from April 6th 2019.
     
    steveroberts61 likes this.
  11. Dorsetdreams

    Dorsetdreams Occasional commenter

    That's really useful information, holdingon, thank you. Can you let us know how/where you found this?
     
  12. steveroberts61

    steveroberts61 New commenter

    OK Cheers Dorsetdreams. I will let you know what I find. I suppose by May i will know if the best 3 in 10 final salary has dropped off a cliff!!!
     
  13. heldon

    heldon Occasional commenter

    You should find that the 3.9% is replaced by the 3% figure. So difference will be reasonably small. That 5% number is the biggie. I will stop this summer at age 56, but won't draw pension until I am 60. Can't wait!
     
    steveroberts61 likes this.
  14. steveroberts61

    steveroberts61 New commenter

    Cheers Holdingon. If you are correct, my planned leaving in December this year will still catch that 5%. I will have 36 years in the pot and be 57. I plan to take it early as I have had enough and just hope the next 9 months is a blur.
     
  15. Dorsetdreams

    Dorsetdreams Occasional commenter

    @holdingon , are you quite sure? I've been trying to find some confirmation and I can't. It just seems to me that one's last 10 years might include a current, un-adjusted year, and that the oldest would therefore have only 9 inflation adjustments applied. But you've given your answers with such confidence. Do you have a source?
     
  16. heldon

    heldon Occasional commenter

    I sent the question to the sppa (scottish teachers pensions). And they told me. I suggest you do the same to your provider.
     
    steveroberts61 likes this.
  17. steveroberts61

    steveroberts61 New commenter

    I presume the bottom line is it will be based on my FTE salary now if it is more than the best 3 in 10. As I have been 0.8 since August 2015 will the final salary be based on the figure when I leave the scheme or over the year up to the date I leave as it takes me an extra 2.4 months to get a year in.
     
  18. steveroberts61

    steveroberts61 New commenter

    I have spoken to the TPS today and they are going to send me my salary adjusted by cpi going back 10 years. Not sure how clear this will be for me to base my judgement on though. I was told that the 0% 2010/2011 cpi rate will start dropping my best average from April this year but it is on a sliding scale so wont be a complete cliff edge more of a steep decline. As my best average 3 years is about £1500 more than my final salary it makes a big difference to my annual pension. I would also be paying in for a smaller pot. so dilemma time.
    Do I try and get it frozen before April and then take it in December or do I let it ride and hope holdingons info regarding the Scottish TPS is correct and applies to the English one and pay in until December.
    Is there a panic button on here.
    Steve
     
  19. heldon

    heldon Occasional commenter

    Never trust anyone else's information.
    Get it in writing from you pension scheme administrator. The make your decision after doing the calculations.
     
    steveroberts61 likes this.
  20. steveroberts61

    steveroberts61 New commenter

    I am still waiting for them to send this information. I was told it would be with me in 48 hours. After a week had passed I phoned them up and they told me it should be 10 days and they hadn't actioned it yet!!!. Still waiting. I am meeting with a man from the Weslyan on Monday evening and was hoping to have this info. All I want is a method to work it out then I would know when to freeze it. Grrrrrrrrrrrr.
    Steve
     

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