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My Pension

Discussion in 'Education news' started by num3bers, Feb 4, 2019.

  1. num3bers

    num3bers Occasional commenter

    A friend has told me that the TPS is in big trouble and currently cannot pay our pensions , and that they have increased employers contributions 40% . In my friends school they have said they wont pay it and are looking to use something else. I am a few years off retiring yet t I am worried .Anyone know anything about this? I havent seen any letters from the TPS.
  2. Francisly

    Francisly New commenter

  3. Rott Weiler

    Rott Weiler Star commenter Forum guide

    There's another thread running on this


    I assume you are in a private school - state schools cannot withdraw from TPS.

    It's not true that the TPS is in "big trouble" or "can't pay our pensions". Whoever told you that clearly doesn't that TPS is an unfunded scheme, nor how actuarial calculations of future contribution rates are done.
    border_walker and nomad like this.
  4. num3bers

    num3bers Occasional commenter

    I am in an independent school, as is my friend. I know there have already been issues at my school with retiring colleagues finding problems with their contributions.

    I am afraid I may be too old to move now as I am no spring chicken in teacher terms.

    Clearly, if my school decides to take us out of the TPS, I dont know what to do. Maybe I should just pull what I have in there out under the release scheme and retire early? I think I am one of those who can leave at 60 ( a few years away yet) or draw down at 55 ( two years to go).

    And yes, it was said the TPS was in trouble paying pensions. That was even put in writing. I saw the e mail.
  5. Weald56

    Weald56 Established commenter

    Ii would take your concerns to your Union and also the TPS.
  6. phlogiston

    phlogiston Star commenter

    Was this said by TPS or your school? A few years ago (Cameron govt?) there were moves to try to ease independent schools out of TPS, which were fought and the battle was temporarily won. Your school may be shifting blame for a withdrawal as TPS perhaps make independent school contributions "too expensive".
    You will be unlikely to lose your TPS benefits. The most likely situation would be that you and your school then pay into an alternative provider (NEST?). When you retire, you then draw two pensions, one based on TPS and an investment based one from NEST. The key thing with transfer to an alternative provider is that sufficient payments are made into the account. If they make payments at some low (2 or 3%) rate, then you will receive essentially nothing at the end of the term.
    These statements come with a health warning - you should get a specialist pensions adviser (union?) or direct information from TPS to check this and to suggest a sensible strategy. I am pretty sure that the worst case scenario would be that on reaching retirement date, you would be treated as a teacher who left teaching to do something else, and then claims a pension later.
  7. nomad

    nomad Star commenter

    Since 2015, employers have paid 16.48% towards the Teacher Pension Scheme (TPS) while employees have paid an average of 9.6% (contributions vary with pay rates so that higher paid teachers, including principals, pay more).

    The recent announcements could mean an increase in the employer contributions to more than 23% - a 40% increase in costs.

    Because the Government actuary's valuation is provisional, the final rate is not yet confirmed.

    The three causes of the increase are:
    • the Treasury decision announced in September 2018 to cut the discount rate used in the valuation from CPI+3% to CPI+2.4%. This replaces an earlier decision to cut the rate to CPI+2.8%
    • the operation of the cost cap mechanism which requires DfE to improve benefits for members where the valuation shows that their overall reward from TPS has deteriorated. The actuary now forecasts that teachers will die earlier than expected and therefore receive pensions for less time. This cost cap floor breach requires improvements to the scheme (for example a faster accrual rate). The current calculation is that this will add several percentage points to costs.
    • the way in which the scheme rules are written into law. The rules are inflexible and this prevents evasive action to cut scheme costs.
    DfE's funding to cover the exceptional increase is likely to be time-limited and incomplete. This will leave the education system in the 2020s with a Teacher Pension Scheme which is unaffordable on current funding levels. Increasing funding would obviously be preferable but even if it happened there would be other uses for the money. A better alternative is probably a review of the scheme rules to bring the costs down
  8. ridleyrumpus

    ridleyrumpus Lead commenter


    For one thing TPS cannot be in trouble as stated as it is completely unfunded.

    There is no pot where the money is held/invested/whatever you are just not paid that amount and the government says it will pay you the money you never paid plus extra when you retire.

    In effect it is a giant Ponzi scheme that would be illegal if run by an independent pension scheme.
  9. PeterQuint

    PeterQuint Lead commenter

    Most of what needs to be said has been said.

    But I will add, if you’ve been paying into TPS for years, and are close to retirement, you have nothing to worry about.

    Even in your school ditched TPS tomorrow, what you’ve contributed uo to now is completely secure.
    eljefeb90, cissy3 and border_walker like this.
  10. border_walker

    border_walker Established commenter

    But, I would add, if you haven't done so, create a TPS account so that you can check on the present state of your pension. All teachers should do this.
    eljefeb90, cissy3, phlogiston and 2 others like this.
  11. Skeoch

    Skeoch Lead commenter

    One more point... you can't, as you suggest, pull what I have in there out under the release scheme, as this isn't a funded scheme. You get your benefits when you retire!
  12. num3bers

    num3bers Occasional commenter

    There must be some way. A couple of teacher friends of mine ( both actually younger than I am I think) took their pension pots and moved to Italy a couple of years back. They employed some system whereby they were able to get their pension money out early and "retire" .

    Not as that is what I want to do. I just want to reach the earliest possible retirment age I can ( I think for me that is 55 because I was in the TPS before the last rule change where they increased the retirement age ( as I understood it at the time).

    Otherwise I will be stuck until I am 67. That effectively means I will have around 25 years in the TPS and some 15 years in some other stuffed scheme ( quite probably the peoples pension as I know the school use this for non teaching staff).

    Before I went into teaching I had another pension for a short time but that was raided by Brown and I doubt there is anything left. It was only a small number of years on that one.

    I am sick of the rip offs on pensions. I wonder whether any of the money has or will be worth it now. I am just looking to get it out one way or another asap.
  13. eleanorms

    eleanorms Occasional commenter

    Probably, like most of us who have been teaching for more than ten years, you have some years in the old scheme and some in the new. You sound like you are fairly lucky and have a few more in the old, better one. The best thing by far is to set up an account with the TPS so that you can check your pension whenever you want. You can't take your money out of the TPS because you haven't got any money in it. It has been given to other retired teachers. I casually look at independent school jobs here and there, and I haven't seen one in the last year which has said it used TPS, they have all said they use their own scheme. It means I cannot afford to apply to an independent!
    border_walker likes this.
  14. letap

    letap Occasional commenter

    Num3bers, from reading your post I would suggest that you get professional pensions advice. The TPS is a very well regarded scheme and it is worth while as others have suggested logging onto the TPS website to see your pensions benefit.
    drvs and border_walker like this.
  15. num3bers

    num3bers Occasional commenter

    Thatks to everyone for the advice. I have an account with the TPS, however, as there seems to have been some blips in that ( school didnt pay the money in or something) they are still sorting out exactly what I have in there. I know that I have paid in fully to the TPS for 25 years now. I was in state school before my current one.

    My best guess is the school will come out of TPS and at my age I am stuffed I guess.

    Now I can see why some of the staff who only had two or three years left to do started to leave with actuarially reduced pensions last year.
    agathamorse likes this.
  16. border_walker

    border_walker Established commenter

    But even if the school do come out you won't lose what hax already been paid in. I presume that they will start a new scheme, so not a total loss.

    Your schools none payment is why every teacher should have a TPS accpunt, and check regularly.

    I will repeat what others have said, you can't take monet out of TPS, are you confused with the lump sum, which they might have maximised.
  17. Rott Weiler

    Rott Weiler Star commenter Forum guide

    And to repeat what has already been mentioned any problems with your contributions being paid to TPS are almost certainly problems caused by your school not by TPS. Now is the time togged those sorted. Involve your union . If there are periods TPS are showing no contributions for have you kept your payslips showing pension deductions from your salary?
  18. MrMedia

    MrMedia Star commenter

    There is something called QROPS or similar where if you move abroad you can take your equivalent pot with you. The issue is of course that as an investment the TPS is superior to any other product. So unscrupulous pension hijackers try to persuade people to QROP their pension out for 'better' investment returns (e.g. property development) and of course the risk is huge so many lose their money.
  19. Lalad

    Lalad Star commenter

    From experience, I can't stress enough how important it is to check your TP statement, and especially your employment history. It's easy to see where there are gaps - in my case, I found several periods were missing, including one year when I had only been credited with 8 months instead of 12:(

    If you are in a LA school, it's the county payroll and pensions department you need to speak to, and they should have a record of your teaching history with them anyway. I rang them, gave them a list of the missing months, and had an email the following week to say it had all been updated. I checked my TP statement again yesterday - no gaps:)
  20. richest1

    richest1 Occasional commenter

    I would say with teachers pensions, your friend is clueless, and should stop scaremongering. The posters below are quite correct, your money is protected. FACT.
    No need to worry.
    border_walker and Weald56 like this.

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