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Retirement question

Discussion in 'Retirement' started by tiredout, Jun 2, 2020.

  1. tiredout

    tiredout New commenter

    I am hoping someone on here might be able to point me in the right direction with a question I have about pensions. I have tried the Teachers' Pensions website but I can't find anything that relates to my particular situation.

    I am 55 and left an SLT job in 2018 because of family circumstances. This was the highest salary of my career and has a significant effect on my salary compared to best three years because most of my benefits are in the final salary scheme. After leaving I had some time out and then did an interim job for two terms. During this job I opted out of the pension scheme because I understood that this was the best way to preserve the pension related to the higher final salary. Since September 2019 I have been working in a job related to education but with different pension arrangements.

    I know that a job I think I would like in a school is about to be advertised. It is at a much lower salary than the job I left in 2018 and would contribute to the teachers' pension scheme. Does anyone know if there is any way for me to be able to take on this job without significantly reducing my pension?
  2. diddydave

    diddydave Established commenter

    It's a little complicated but there is, I think, some good news for you.

    The final salary scheme, which I presume you have been in, uses different ways to calculate your 'final salary' - as well as the last 12 months they also look at the best 3 consecutive years worth of salaries out of the last 10 years. If you worked at your SLT for at least 3 years, i.e. 2015-2018, then those years will be used in working out your final salary up until 2025...so only if you work past that point will your pension run the risk of dropping. You can check this on your benefit statement from the TPS website. On it they will have two methods of calculating your pension - Method A (the last 12 months) and Method B (best 3-in-10). If Method A is much more than Method B then you may need more expert advice but otherwise checking the Method B dates will tell you how long you can work up until without penalising the pension calculation.

    Also, there is what is called the 'hypothetical calculation' that will protect your pension up to the point where you had the break in service. This is one to be aware of particularly if you do not see yourself earning more than you did at the break. It is quite possible for someone in your circumstances to do another few years, paying into the pension but getting nothing more because of it.

    I do like puzzles so if you are happy to share your benefit statement with me I can do some calculations and give you a little more personalised numbers to work with.

    Finally, there is the issue of the Court case that the Government lost and on which the employment tribunal has yet to fully rule on what restoration or other options are going to be made to the scheme and because of this there is no clear cut definitive answer to what is the best route to take in your circumstances.
  3. tiredout

    tiredout New commenter

    Thanks Diddydave. That helps a lot.
    diddydave likes this.

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