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  • FIRST POST
    • chats42
    • By chats42 18th May 17, 12:41 AM
    • 4Posts
    • 0Thanks
    chats42
    Annual pension or lump sum
    • #1
    • 18th May 17, 12:41 AM
    Annual pension or lump sum 18th May 17 at 12:41 AM
    Hello, bear with me, this is very basic, but I've lived abroad all my life until the last few years... when I looked at my Teachers Pension with a view to calculating if it's worth taking early retirement it shows me an annual pension and a lump sum next to each other on a bar chart... is it one OR the other? Or do you get both?? Thanks. (P.s. Teachers Pensions have been offline for days and if you can get thru on the phone they do not answer...)
Page 1
    • bostonerimus
    • By bostonerimus 18th May 17, 3:30 AM
    • 636 Posts
    • 331 Thanks
    bostonerimus
    • #2
    • 18th May 17, 3:30 AM
    • #2
    • 18th May 17, 3:30 AM
    You'll get both....I don't know about your particular scheme but in some you can use the lump sum to buy an higher pension amount.
    • xylophone
    • By xylophone 18th May 17, 9:09 AM
    • 22,352 Posts
    • 12,892 Thanks
    xylophone
    • #3
    • 18th May 17, 9:09 AM
    • #3
    • 18th May 17, 9:09 AM
    https://www.teacherspensions.co.uk/members/planning-retirement/calculating-benefits.aspx

    Is available.

    Final Salary Arrangement
    If your Normal Pension Age is 60 your final salary benefits are:

    A pension calculated by multiplying your service by your average salary and then dividing by 80; and
    A lump sum equal to three times your pension.
    If your Normal Pension Age is 65 your final salary benefits are:

    A pension calculated by multiplying your service by your average salary and then dividing by 60.
    • Snowbelle
    • By Snowbelle 18th May 17, 9:38 AM
    • 303 Posts
    • 85 Thanks
    Snowbelle
    • #4
    • 18th May 17, 9:38 AM
    • #4
    • 18th May 17, 9:38 AM
    You'll get both....I don't know about your particular scheme but in some you can use the lump sum to buy an higher pension amount.
    Originally posted by bostonerimus
    I thought it was the other way round in that you can take a larger lump sum in return for less pension amount.
    Also, asking for a relative who is a deferred member with NPA of 60 is there any benefit in them taking this later than 60? I cannot see anything regarding this on the website.
    • xylophone
    • By xylophone 18th May 17, 10:36 AM
    • 22,352 Posts
    • 12,892 Thanks
    xylophone
    • #5
    • 18th May 17, 10:36 AM
    • #5
    • 18th May 17, 10:36 AM
    I thought it was the other way round in that you can take a larger lump sum in return for less pension amount.
    Also, asking for a relative who is a deferred member with NPA of 60 is there any benefit in them taking this later than 60? I cannot see anything regarding this on the website.
    https://www.teacherspensions.co.uk/members/faqs/planning-retirement/calculations.aspx

    Providing you have pensionable service on/or after 1 January 2007 then yes the commutation option is available to you. This allows flexibility to increase your lump sum by sacrificing one pound of your annual pension for twelve pounds of lump sum. You can do this up to the limit of 25% of the fund value. You are able to work out your limit by using the calculators or by following the formula below.

    For members in the 1/80th scheme arrangements the formula is pension x 33 / 14 + max additional lump sum.

    Max additional lump sum / 12 = cost to the annual pension

    For members of the 1/60th scheme the formula is pension x30/7 = lump sum.

    Lump sum / 12 = cost to your pension benefits.



    Re reaching NPA (From Deferred Member - Your Guide to your Pension- Teachers' Pensions)

    Age
    Once you reach your Normal Pension Age(NPA)
    and provided you are out of service you should
    claim your benefits.
    If you delay making your claim
    then your benefits will be backdated to your last day
    of service or when you reached your NPA, whichever
    is the later. Any backdated payments will be paid as
    a lump sum and will be subject to tax.
    • chats42
    • By chats42 18th May 17, 10:38 PM
    • 4 Posts
    • 0 Thanks
    chats42
    • #6
    • 18th May 17, 10:38 PM
    • #6
    • 18th May 17, 10:38 PM
    Thank you all very much! One thing I don't get, why Jan 2007? It seems advantageous...Unfortunately for me I joined in October 2006!
    Another thing= this site is so hard to navigate. When I look in the Pensions forum my question isn't shown, I have to search the site for "lump sum". Any suggestions? Presuming I can get back here ha ha!
    • hyubh
    • By hyubh 18th May 17, 11:52 PM
    • 1,859 Posts
    • 1,378 Thanks
    hyubh
    • #7
    • 18th May 17, 11:52 PM
    • #7
    • 18th May 17, 11:52 PM
    It seems advantageous
    Originally posted by chats42
    It's not, 12/1 is a very poor commutation rate.

    ...Unfortunately for me I joined in October 2006!
    It's not when you joined, but when you left.

    Another thing= this site is so hard to navigate. When I look in the Pensions forum my question isn't shown, I have to search the site for "lump sum". Any suggestions?
    Dunno, though I still have the old-style site enabled (much better usability-wise, IMO, and the Soviet-style badges look a bit weird..).
    • Snowbelle
    • By Snowbelle 19th May 17, 1:08 PM
    • 303 Posts
    • 85 Thanks
    Snowbelle
    • #8
    • 19th May 17, 1:08 PM
    • #8
    • 19th May 17, 1:08 PM
    Thank you all very much! One thing I don't get, why Jan 2007? It seems advantageous...Unfortunately for me I joined in October 2006!
    Another thing= this site is so hard to navigate. When I look in the Pensions forum my question isn't shown, I have to search the site for "lump sum". Any suggestions? Presuming I can get back here ha ha!
    Originally posted by chats42
    If you log in to your account and look at your Benefits Statement it should show the tax free lump sum amount and the annual pension amount. If you scroll down from this there is much more information including details of taking an optional lump sum.
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