Reduced pay scale and Final Salary Pension calculation

Anjelika

Hello all


Please can somebody help with an employment issue linked to final salary pension.


I am very close <months> to retirement and have worked for 10+ years as a sessional lecturer at a Further Education college across different departments.


My hours have fluctuated over time but have been no more than 200 hours annually. Owing to recent cutbacks and some courses being axed my hours have been reduced to 50 for this coming year. Although these hours are calculated and contracted at the beginning of the academic year I do cover etc. so I complete a time sheet monthly and have it authorised by heads of department. The Annual contract from the College sometimes does not appear until after term has started, however this year I have received a contract setting out hours but offering a reduced pay scale; approx 30%.


I have been contributing into the standard Teachers pension based on final salary my question is :
If I accept and sign the proposed Contract how will this affect the terms and final calculation of the pension? The college pension advisor has been unable to shed any light, can anybody on here?


Thanks in advance





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hugheskevi

From a spot of Googling, I think the appropriate guidance is here, specifically:

What method is used if benefits become payable on or after 1 January 2007?


The better of the following calculations will be used:

• The salaries for the last ten years are increased at each salary change to current day value in line with the RPI. The average of the best consecutive three years re-valued salaries in those ten years is used;
• The pensionable salary received in the last 12 months of employment before the date or retirement.
• If benefits become payable between 1 January 2007 and 31 December 2008, the method in existence before 1 January 2007 will be used if this provides the highest salary.

Are there circumstances where the average salary may differ from the methods above?

Yes, There are two circumstances where the average salary may be calculated in a different way. These are:

• Where the method of calculating benefits is based on 365 days, if the rate of salary has increased by more than 10% above the standard salary increase in your sector or institution in the three years leading up to retirement, the full amount will not be used in the calculation of retirement benefits unless the employer pays an additional contribution to the scheme;
• Where a member has a break in service (and at that point has sufficient service to qualify for a pension and lump sum) retirement benefits are calculated using the average salary at the break and these benefits are then increased in line with the RPI. The resulting amount is compared with the usual method of calculating benefits and the better of the two is put into payment. In most cases this alternative or ‘hypothetical’ calculation uses the whole of the reckonable service but if the final salary at the break is higher than at retirement, then only the reckonable service up to the break is used.

Anjelika

thanks for help and link