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pension opt-out, advice please

Discussion in 'Retirement' started by katechb, Sep 30, 2015.

  1. katechb

    katechb New commenter

    Hi Everyone,

    I 'm still wrestling with the problem of how to take my pension/cut down my hours /not have a break in Service - yes, I know it seems as if I want it all ways! But I'd be very grateful for your comments, please.

    It has been suggested to me that [as I'm 60] I can opt-out of the Teachers' pension scheme and start receiving my Pension- this is actioned by applying online in the calendar month before one wants one's pension to be payable. I'd like to do this in December of this year .I'm led to believe that when doing this I can also ask school to reduce my days from 5 to 2 per week, also from January, and that this would not necessitate a break in service. Working two days, apart from being utter bliss, also means that I stay within the guidelines of the amount I'm able to earn whilst receiving my pension,
    I was wondering if anyone had any experience of this, please?

    Thank you,

  2. lindenlea

    lindenlea Star commenter

    Not much to offer but remember the school does not have to accede to your request.
    edit: From the other thread you must know this. Have you put out any feelers about cutting your hours yet?
    katechb likes this.
  3. katechb

    katechb New commenter

    Thanks for your reply, no, not yet and if they said no I would still retire, it's the 'opting out' that's making me a little nervous-it seems too good to be true yet I haven't heard of anyone else doing it!
  4. wanet

    wanet Star commenter

    I don't understand what you mean by opting out. there are advantages to taking your pension before 60, but after 60 you are allowed to earn a certain amount from teaching and still take your pension. once you take your pension, if you work part-time and still pay into it the extra pension will be under new rules.

    However, you are better off checking the details on the TPS website.
    katechb likes this.
  5. katechb

    katechb New commenter

    Hi, by opting out I mean no longer being a paying in member of the pension scheme and therefore being able to draw my pension, but I don't want to also retire, just reduce my hours. I won't pay into the pension scheme at all after the opt out just work part-time-sorry if I'm not explaining it terribly well-it seemed almost too good to be true when it was suggested to me! Thanks for your response
  6. lizziescat

    lizziescat Star commenter

    Are you talking about phased retirement here?

    If not then, you can take your pension and work afterwards subject to a cap on how much you can earn. You would have to have a break in service (of 1 day?) Of course whether there is work once you've retired will depend on whether your school wishes to offer it.
    Once back in post-retirement work. You will, as Wanet, says be paying into a new pension scheme. I think this is what you can opt out of, if you don't think it is worth it.

    Why are you concerned about not having a break in service?

    Have you contacted TP yet? You need to do so to get the definitive information about the options open to you.
    lindenlea likes this.
  7. lindenlea

    lindenlea Star commenter

    Yes, you don't need to waste any more energy over "what if....". You need some real information. Good luck.
    katechb and lizziescat like this.
  8. catmother

    catmother Star commenter

  9. tudor01

    tudor01 New commenter

    Try looking at phased retirement - but as mentioned it does depend if your school will allow you to go part time. Once you accept part or all of your pension and continue teaching I believe that a new pension plan is opened and you start paying into that. With the best will in the world the school does have to consider its staffing requirements objectively and you will have to fit into their plan. Ask and see what comes up!
  10. Viane

    Viane New commenter

    Phased retirement entitles you to withdraw up to 75% of accrued benefits and remain in the same pension scheme.

    Accepting full age retirement and then resuming employment means you start a new pension.
    katechb likes this.
  11. katechb

    katechb New commenter

    thank you for your comments, much appreciated. School have agreed to my working two days a week from January -I feel very fortunate! in CASE ANYONE is interested in doing anything similar, I've opted out of the Teachers' Pension scheme this month so will start drawing my full pension from January. I won't opt back in , but just take my two days' earning without pension deductions which keeps me well within the amount I'm allowed to earn.
  12. wanet

    wanet Star commenter

    You haven't really opted out, you have taken your pension.
  13. wanet

    wanet Star commenter

    Your part-time work will increase your state pension as you will be paying a normal National Insurance contribution.
  14. jubilee

    jubilee Star commenter

    Your Union should have someone to advise you on the options.
    I know someone who phased in her retirement, reducing her working week and drawing down part of her pension lump sum and part of her monthly pension. She then had to retire completely within a specified period.
    I can't recall if she actioned the partial retirement before age 60 or not.
    She needed to action her pension by a certain date to have her best 3 years of the previous 10 used in the calculation. Her highest earning years were approaching the 10 year cut-off.
    Whilst working p/t and receiving 75% of her pension (I think) she was better off than when working f/t. I don't know if she stopped contributing to the TPS when she reduced her hours.
  15. jubilee

    jubilee Star commenter

    wanet- Contracted-Out NI contributions (paid when in an occupational pension) also increase your State Pension years.
    Contracted OUt terms mean that you are not Contracted In tot eh State second pension (SERPS) WHICH HAS (OR IS GOING TO BE) DISCONTINUED ANYWAY. yoU ARE STILL PAYING IN TO THE basic State pension
  16. emerald52

    emerald52 Star commenter

    You HAVE to have a break in service of one day or the lump sum will be taxed so you lose 20% of it. Take care with the small print or you will lose out.

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