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Why do I need to be concerned about pension

Discussion in 'Retirement' started by izzywhizzal, Jan 26, 2016.

  1. izzywhizzal

    izzywhizzal Occasional commenter

    I'm 50. Full time Deputy HT for 7 years. Union arranging a settlement agreement so that I can leave my job. Colleague trying to support me saying watch your pension! Not sure of the implications of my actions in terms of pension. Hope to return to education but eyes wide open to any options for the future. Can anyone advise please?
     
  2. FrankWolley

    FrankWolley Star commenter

    Hmm... I'm not sure either. Have you asked your union? Obviously if you work fewer years you will get a smaller pension than someone on a similar salary who works for longer. And you can't, as far as l am aware, take it until 55 unless it is due to ill health.
     
  3. applecrumblebumble

    applecrumblebumble Lead commenter

    I think the concern might be that the final salary condition is based on your best three years beyond the age of 50. ie. the value of your average salary used to calculate your pension will be based on the best 3 years salary prior to retiring. If you go into education as say a class room teacher (UPS not in London) and work for a further 3 years then your pension will be based on this (37000 ish). I suspect you were earning at lot more than this and you cannot retire until you are 55years old and take an ARP.
    Now it could be that your union have negotiated with the school to make pension contributions up to the age 55 based on your present salary or you have managed to get a very large lump sum to compensate for the potential loss of pension. I do not know what you have negotiated but I would like to think your union would not have advised you to leave your job without these things being considered. If not then you will have to find another DHT post and continue your career in another school.
     
  4. emerald52

    emerald52 Star commenter

    Make sure you take your pension early at 55 so you still have it based on the 3 best years in the last 10. Have one day gap in contract before you re-start teaching. You can start a new pension too.
     
  5. jacob

    jacob Lead commenter

    If you are only 50 now you will have been switched to the average salary in the TPS revisions of 2007. Only those over 50 then stayed on final salary. If you do not pay more into TPS it will be "frozen" until you can claim it. Assuming you were a teacher before the revisons your pension may be in two portions, based on final salary up to the changes, and average after. TPS may have explanations on their website, or you could contact them.
     
  6. applecrumblebumble

    applecrumblebumble Lead commenter

    I kind of agree with you Jacob but it depends whether the OP is a protected member or not. I took this off the TPS site.

    What if I left service after 1 April 2015?

    If you were a protected member in the final salary arrangement and return after a break of less than five continuous years then you will remain in final salary on your return to pensionable employment.

    If you were a protected member in the final salary arrangement and have a break in service of more than five continuous years, then you’ll enter the career average arrangement on your return to pensionable employment but, your existing benefits will remain in final salary.

    If you had no protection but return after a break of less than five continuous years then you will enter the career average arrangement but will have a link between the salaries you earn in career average and your final salary benefits.

    If you had no protection and return after a break of more than five continuous years you will enter the career average arrangement. If you had both final salary and career average benefits when you left service then your final salary benefits will be calculated using an average salary based on your salaries at the start of the break.

    The OP will know what kind of member they are from their pension statement. If these areas were discussed with your union I cannot see any real concerns but as Jacob says consult TPS for a second opinion.
     
  7. lindenlea

    lindenlea Star commenter

    I think your colleague simply meant that any other employment may not offer as generous a pension as you are contributing to now. When my d-i-l left local government I said the same to her.
     

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