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Pension question

Discussion in 'Pay and conditions' started by jubilee, Nov 2, 2011.

  1. jubilee

    jubilee Star commenter

    There is no pension pot with the TPS.
    The employing LA deducts the superannuation and it ultimately passes to the Government (Treasury) witht he TPS notified of your contributions.
    The Treasury basically pays out current TPS pensioners from the payments made by working teachers paying into the scheme. We will, likewise, be paid out from the Treasury when we retire.
    The advantage of the scheme is that we don't have contributions invested in the Stock Market, where the value can drastically decline. Also, we have a guaranteed payout based on service and salary whereas those with invested pension pots have to buy an annuity with the value of the fir fund at retirement. Annuities are variable and two people retiring at the same time, on the same salary and with the same service record can end up with wildly differing pensions because:
    Men get paid more than women (die earlier on average);
    Those in poor health get more than those with no health issues at retirement; Smokers get paid more than non-smokers.
    Teachers and others in Final Salary schemes don't have to negotiate that system and know in advance of retirement what their pension will be.
    Wait a year and check with the TPS that your TPS membership has been crdited with your new employment service. Errors do happen even when teachers don't change schools.
    My sister received her pension forecast from the TPS earlier this year and there was a 7 month block missing from her record. They had records of her contributory service at the same school before and after the missing block.
     
  2. Not quite totally correct.
    There is no pot. Contributions are treated as income by the government. Payments to pensioners are funded from general taxation income.
    If there had been a pot it might very well be a large one now.
    An interesting example is the Canadian Ontario Teachers Pension Plan which started investing in 1990 with a portfolio of $19bn. It is now valued at $107bn. The scheme funds the retirement income of a mere 295,000 pensioners.
     
  3. jubilee

    jubilee Star commenter

    That's what I said.
    It might also have been a very small pot of money had they invested in otehr areas.
    There was a time over 30 years ago when someone showed that the TPS would have been able to pay out bigger pensions had it been an invested fund (based on the companies that other pension funds were buying shares in) but that position would have reversed omn many occasions since , especially recently with the hige drops in value of Bank shares (Banks were seen as secure Pension funds investment for years).
     

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