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Understanding teachers’ pensions

Discussion in 'Retirement' started by TES_Rosaline, Jan 8, 2018.

  1. TES_Rosaline

    TES_Rosaline Administrator Staff Member

  2. flishflash

    flishflash New commenter

    The bit that I can't get my head around is inflation.

    a) You take your best three years in 10, or your last salary, to work out your pension.
    b) Then the pension goes up each year depending on some inflation figure, which seems fixed for each year included. But it seems to depend on previous years not the current year.

    Some people on here also seem to be saying that the had such good years in the past when inflation was high, that even after they paid in an extra year now, their pension actually went down because inflation is so low at the moment compared to past years!

    No wonder people get confused. What's needed are some really clear examples to illustrate how the above work in practice!
    richest1 likes this.
  3. emerald52

    emerald52 Star commenter

    It's the difference between the pension you get, updated every year using previous year's inflation, and, the salary of reference, best 3 years in 10, uprated for inflation, that your pension is based on. Salary of reference £40k, 20 years in Teachers pension = pension of £10k.
    richest1 and dzil like this.
  4. jubilee

    jubilee Star commenter

    It's the best 3 years in the last 10 years before claiming the pension or the last (full) salary point earned (not the last actual salary earned if you were p/t).
    The number of pension years accumulated is then used to make calculations based on the best average salary or the final salary.
    The best 3 out of 10 years is something that people should consider if they had an SLT position for a few years and then took a lower paying position as they headed towwards retirement. I knew someone in that position and told her to make contact with her Union to make sure that she got precise advice on when to trigger he rpension.
    Her final salary was just over £50k but she had earned £55k+ for sveral years before being made redundant.
    She ended up triggering her penion in a phased way, by reducing her working week and getting part of her lump sum plus part of her pension. She then added over a year to the calculations with her p/t work and eventually finished, claimed the final, biggest part of the lump sum and the rest of the annual pension. All the calcualtions were based on her £55k+ salary.

    The situation will be different for teachers in the new TPS as their pensions do not have an automatic lump sum and will be based on career average salary. To maximise the eventual payout, teachers would need to be in senior positions as easly as possible in their careers and should then try to stay in post.
    richest1 and border_walker like this.
  5. MrMedia

    MrMedia Star commenter

    Try being a transition member. It’s a nightmare. We’ve got two pensions -each maturing at a different age. None of us are working past 55-60.so we’ve got to do some kind of convoluted AVCs draw down combined with phased early retirement.
  6. gmoore

    gmoore New commenter

    Forgive my ignorance but I am thinking of going for ill health retirement on the grounds of mental health and also scoliosis in my back which has severly affected my performance over the years. I have medical evidence for both issues. However I am worried that the money I would receive would be no where near enough to survive let alone live. I have been teaching since 1997 and am currently on L& outer London weighting. Can anyone advice?
  7. jubilee

    jubilee Star commenter


    You would only get Enhanced benefits if you were stiil in post when applying to retre on health grounds and you were deemed unfit for any work.

    If you were deemed capable of doing alternative work, you would just retire with your accrued pension years (which would appear to be 20 02 21 in your case). There would be actuarial reduction sfor taking the pension early.

    You really need Union and/or specialist advice on whether it's in your interests to pursue ill health retirement.
    It may, for instance, be better to use your sick pay allowance in the first instance. If the school then took measures to cancel your contract under Capability proceedings, you would fall into the State Benefits allowances for those deemed incapable of work (Incapacity Benefit that is now called Personal Independence Paymeny, I think). Get proper advice to see what would work best for you.
    There are no guarantees of getting approved for Ill Health Retirement, so you would at least know what the alternative provisions are.
    Are you 55 or over as that is the age when you can claim the TP with an actuarial reduction of about 20% (reduced lump sum and reduced pension based on what your accrued years would get you if you waited until age 60 to get it).
    border_walker likes this.
  8. gmoore

    gmoore New commenter

    I have just heard from my union and they tell me total incapacity is incredibly hard to get as in one case a member was using an iron lung but still told they could work as a proof reader. I find this ridiculous! Anyone else had experience of getting the higher tier medical retirment?
  9. AlwaysAdaptable

    AlwaysAdaptable New commenter

    Is something wrong with Teachers Pension website. I have tried logging in several times and it keeps on asking me to update my details. I do it but cant access any thing on there.
  10. border_walker

    border_walker Lead commenter

    I had this - had to put UK into country. You need to keep hitting the right buttons to get it to work, it did eventually.
    AlwaysAdaptable likes this.
  11. AlwaysAdaptable

    AlwaysAdaptable New commenter

    Thanks border_walker. I typed UK into country and it worked.
    border_walker likes this.
  12. Artworks0688

    Artworks0688 New commenter

    I’ve had a nightmare with teachers pensions and my employer.
    Because my employer gave the wrong information my pension has been stopped for a year. I resubmitted a return to work form myself as advised, no luck. Now I’m expected to send in another one with all details for the year myself. Does anyone know where I can get some help?
  13. andyblox12

    andyblox12 New commenter

  14. andyblox12

    andyblox12 New commenter

    Your application will be assessed against the ‘two-tier’ criteria if the application is made while ‘in-service’ and, thereby, may give rise to an enhancement. The two tiers are described as follows:

    TIER 1 - Ill-health pension based on your accrued benefit in the scheme. This is payable if you are assessed by TPS as meeting the ‘incapacity condition’ i.e. ‘incapacitated’ and likely to be ‘incapacitated permanently’. This is where you are permanently unable to teach, but may be able to undertake other work up to your NPA; and

    TIER 2 - An enhancement known as ‘Total incapacity benefit’ (in the 2010 Final Salary arrangement) or ‘Total incapacity pension’ (in the 2015 Career Average arrangement). This is where you meet the ‘Total incapacity condition’ because you are assessed as not only being permanently unable to teach, but you are also considered unable to undertake any ‘gainful employment’* up to your NPA. This is referred to in this Guide as “total incapacity enhancement”.

    * ‘Gainful employment’ refers to wording in the regulations whereby a person’s ability to carry out any work is impaired by more than 90% and is likely to be impaired by more than 90% permanently.
  15. andyblox12

    andyblox12 New commenter

    Hi MrMedia,
    You'll have monies in one of the 'final salary' arrangements depending on when you joined the teaching profession - either pre or post 2007. As such they'll have an NPA of either 60 or 65 respectively.
    Then, in April 2015, you transitioned over to the new 'career average' which has an NPA of your state pension age, e.g. 67/68.
    You will only be able to draw the two sections of the pension separately, if you first reach the NPA on the relevant 'final salary' section. So if you are thinking of retiring early, let's say 57/58, then you will have to take both portions of the pension at the same time, with the appropriate 'actuarial reductions' applied to each section
  16. jubilee

    jubilee Star commenter

    You should get financial advice once you find out what your early pension would be.
    Ill health retirements are not so easy to get these days. Use your Union.

    Get advice on the welfare benefits available too for those deemed unable to work because of health issues. It may be that you could manage on that or on a less demanding job and could delay claiming your Teacher's pension until nearer you designated retirement age.
  17. jubilee

    jubilee Star commenter

    The inflation element of the pension is what happens when you are drawing the pension. It is not part of your pension calculations when working.
    Your initial pension is based on how many years and part years thta you have accrued, andwhat paypoints you are on (or were on).
    The best three of the last 10 years, for instance (in the old TPS) will use the current value of your best 3 paypoint years, not allocating inflation figures to the actual pay that you got in specific years.
  18. MrMedia

    MrMedia Star commenter

    Effectively,, unless I come into money, I won’t be able to draw my first pension without reduction of both until age 60. If I pay into AVCs what would happen to those?
  19. Sundaytrekker

    Sundaytrekker Star commenter

    AVCs are completely separate and you no longer have to take them at the same time as your teacher’s pension. They are a fund and the maturity date will depend on how they were set up. Lots of people use AVCs to plug the gap between finishing work and drawing their main pension.
    andyblox12 likes this.
  20. MrMedia

    MrMedia Star commenter

    Draw down AVCs here I come!
    andyblox12 and Sundaytrekker like this.

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