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Yet another 'best 3 years in 10' thread

Discussion in 'Retirement' started by suestan1, Sep 23, 2017.

  1. suestan1

    suestan1 New commenter

    I've ploughed through loads of postings but still have questions! Each time I phone TPS I hang on for ages, get my answers and then think of further questions that the answers have raised!

    My latest question is if I opt for early retirement at age 54 in order to freeze my best 3 years do I actually have to take the pension or can I leave it until I'm 60, therefore not suffering ARB? I've been assured y my HT that I can be re-employed on a new contract which I'm assuming will be part of the career average scheme?

    I know that I can opt out of the pension scheme and carry on working but then I'll lose the chance of accruing further years in the career average pension.

    Any advice from anyone?
  2. 50sman

    50sman Lead commenter

    As I understand it but please check with tp
    You can only take early retirement (arb) at age 55.
    You can be re-employed.
    You have to claim the money however as you have applied for it.
    The only other way is to leave the pension scheme which is what you say you do not want to do
    suestan1 and emerald52 like this.
  3. FrankWolley

    FrankWolley Star commenter

    You have to speak to TPS or an expert, independent pensions expert. Really don't listen to us - too much at stake for you!
    suestan1, nomad and wanet like this.
  4. emerald52

    emerald52 Star commenter

    Read the TPS website as that is all an independent adviser can do. You can email TPS too.
    suestan1, wanet and nomad like this.
  5. nomad

    nomad Star commenter

    Your union may have a pensions adviser who you can talk to. The NAHT certainly does (and excellent he is too) but I am not sure about other unions/
    suestan1 likes this.
  6. gl650dude

    gl650dude New commenter

    You must wait until you are 55 before taking early retirement as previously mentioned. You can leave your pension until you are 60 (or whatever your NPA is) but the "best 3 years in 10" is calculated when you actually start taking your pension (according to my pension advisor). To complicated things further, I believe you are already now in the average salary pension scheme so the calculation will not be straight forward. Ask TPS for an ARB pension estimate (you can do this a year in advance of you becoming 55). If you do take ARB at 55, you can be re-employed with the option of further contributions into the new pension scheme but there are rules on how much you can earn in teaching if you are also taking the ARB pension. I strongly urge you to get expert advice which should be possible through your union.
    suestan1 likes this.
  7. emerald52

    emerald52 Star commenter

    @gl650dude Sorry but are wrong about how much you can earn. If you take ARB before 60, have at least a day break in contract, you can earn any amount from teaching. If is after 60 that you cannot earn more than salary of reference if you take pension after 60. Earnings are salary and pension.
    suestan1, FrankWolley and wanet like this.
  8. mymintpark

    mymintpark New commenter

    Hi dear all, I've just joined this site and I too am puzzled by the 3 best of 10 - have I understood the basic thing correctly?
    Im considering dropping out of my uni lecturer job (high salary) to teacher train for a year, then school teach at quite possible half the salary I earn now.
    Does 'best 3 of 10' mean that if I want the 'best 3' to be based on my uni salary of the past three years, I will need to opt out of tps after teacher training plus 6 years to avoid pension suicide (e.e. best three at uni + teacher training + plus six in a school)?
    Or else, say, I'd keep working at low salary for another three years, pay in more money, and receive a massively worse (potentially halved) pension?
    Is that correct in all its absurdity?
    Sorry for imposting on the thread - not sure if appropriate, but thanks for any thoughts!
  9. emerald52

    emerald52 Star commenter

    Is your uni salary in TPS or are you transferring it in? If not it can’t count. Uni will have their own pension scheme possibly with different rules.
  10. catmother

    catmother Star commenter

    Dropping from a highly paid university lecturer role to train to become a school teacher and get paid half of what you currently earn? That sounds like a great move!
  11. mymintpark

    mymintpark New commenter

    Hi catmother, I know. Harakiri. Have read threads and threads of depressing accounts of working conditions and mess in teaching. And yet. I need change (teaching another subject that I'm more passionate about - languages, and flexibility - different schools in different places). If that comes at the price of half pay and twice the work for a while so be it. Voluntary severance scheme and bursary would make the switch possibly right now. Unis are in a mess too.
  12. mymintpark

    mymintpark New commenter

    Hi emerald52, yes I'm in a post '92 uni, my pension is with TPS.

    I was on the phone yesterday for half an hour with an adviser who was hard work I must say. We did not get very far, as transition membership in combination with being out for a year on a PGCE was a bit much for her (and me).

    What I think she said is that I would become a 'deferred member' for my year at uni, then, if I went back into 'pensionable service', the 10 years under consideration for best 3 would be counted backwards from the point of my going into deferred membership.

    That seems odd in itself and insofar as it would be doubly advantageous for me: my pension (whenever I'd be taking it, according to her) would be based my much higher, long-past uni-salary; and also, coincidentally, this would then include a couple of 'golden years' (by the inflation or whatever it is adjustment) 2009-2010/2010-2011 (and this would not be the case if I just went on teaching at uni with the relevant 'ten years' just shifting with me into the future).

    Does this make any sense? I'm not confident in this advisor's understanding of things and/ or I might not have understood her correctly either.

    Any comments would be great! Thanks!
  13. mjfp509

    mjfp509 New commenter

    My understanding of what is correct is what you said in your first post..." I will need to opt out of tps after teacher training plus 6 years to avoid pension suicide (e.e. best three at uni + teacher training + plus six in a school)?"
  14. Dorsetdreams

    Dorsetdreams Occasional commenter

    I think that you were being told that the year's deferral will give you one extra year in your counting backwards - so you could earn your lower salary for 7 years without affecting the final salary calculation. This does make sense.

    That can't be right. Had the conversation moved on to what might happen if you did not re-enter the pension scheme, or if yoy opt out after 7 years? Depending on your age and long term plans, doing that (defer one year whilst training, opt out after another 7 years of teaching) might make sense.
  15. mymintpark

    mymintpark New commenter

    mjfp509, dorsetdreams, thanks, what you say makes sense and is what I would assume. I am going to call them back and try with another adviser, to check.
  16. mymintpark

    mymintpark New commenter

    PS Another chat, now with a switched on adviser at TPS.

    I have now understood properly, I hope, the following (writing this for myself, kind of, you've probably all totally got this...:)...

    The final salary portion of the pension (which is the only one concerned by the 3 of 10) is 'finished' i.e., not accruing anymore, given that the scheme ended in 2015, BUT the final payout is based on continuing salary development, beyond 2015 (best 3 of 10 at time of retirement or end of pensionable service). So a declining/lower salary for a sufficient period of time (7+years) leads, shockingly, to a lower pension for that part of transition members' pensions.

    However, bizarrely, if there is a break in service (as in my teacher training scenario, with a year of 'deferred membership') something called a 'hypothetical' calculation sets in whereby the basis of the final salary pension payout will be retro engineered to include the pre-break service, so no harm will be done by post-break lower salary no matter how many years pass by (exceeding the frame of 3/10).
    Adviser assured me that that is so despite it seeming a strange distortion and disadvantaging of cases where no break has occurred. I think I'll play this back to them, it's very odd that it's the break should get me off the hook of diminishing returns. Might just be a lucky for me quirk of the system if true.

    I've also now understood that the average salary pension part (post-2015) is not affected by ups and down in salary as it is going strictly by a 57th of any year's salary and what that adds up to.

    Will check and double check if I got this straight...
  17. Prim

    Prim Occasional commenter

    Whilst it is entirely your call in terms of what you do. Have you seriously considered the impact of switching careers? You'll probably start on £24k as an NQT, how long have you been teaching in HE? Why don't you look for a sideways promotion in HE or move to another institution? Just some options.

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