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Pensions - how is it affected by part time working.

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  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    thenap80 wrote: »
    I am 100 percent certain it is a final salary pension scheme. So with this in mind, does that mean the pension that I get is based solely on the salary I earn in my final year. So if I went bk to being full time in my 30th year, I would be taking home a pension the same as people in the same boat as me but who didnt go part time mid-career.

    Thanks


    you need to read the rules; final salary schemes have different ways of working out your 'final salary'.
    typically they are based on the nominal fulltime salary even if you work parttime; the parttime bit reduces the number of 'years ' in the scheme.
  • thenap80
    thenap80 Posts: 437 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    CLAPTON wrote: »
    you need to read the rules; final salary schemes have different ways of working out your 'final salary'.
    typically they are based on the nominal fulltime salary even if you work parttime; the parttime bit reduces the number of 'years ' in the scheme.

    Sorry, what do u mean by 'nominal fulltime salary' and that that the part time bit reduces number of years?? Thanks so much for your replies.
  • RichandJ
    RichandJ Posts: 1,087 Forumite
    thenap80 wrote: »
    Sorry, what do u mean by 'nominal fulltime salary' and that that the part time bit reduces number of years?? Thanks so much for your replies.

    I've just spent another Saturday at work doing these calcs. Basically if you were to move to working for e.g. 3 days/week your pensionable service would be pro-rated so one year would count as three fifths of a year.

    Full time equivalent (dunston's nominal) is just that, the full time equivalent of the salary you are receiving. However, how thus then feeds into your pensionable salary will depend on how the scheme rules define PenSal.

    As stated above you need to find out what the rules say.
    It only takes one tree to make a thousand matches, it only takes one match to burn a thousand trees. As well, the cars are all passing me, bright lights are flashing me.

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  • real1314
    real1314 Posts: 4,432 Forumite
    thenap80 wrote: »
    Sorry, what do u mean by 'nominal fulltime salary' and that that the part time bit reduces number of years?? Thanks so much for your replies.


    Simple explanation (?):-

    You have full time earnings of £20k per annum, and each year of work gets 1/80th of final salary as pension; 40 years of work & contributions gets you half pay as a pension £20k Full Time Salary x 40 years / 80 = £10k pa

    A different member of staff has the same full tiem salary rate, but they work half the hours, so their pay is £10k.
    The pension scheme treats each year of part-time work as half a year towards the pension. They do 40 years of part-time work and finish with 20 years accrued compared to your 40 years.

    They get £20k full tiem salary x 20 years / 80 = £5k pa
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    What it means is that we can't tell you the answer. The answer depends on the rules of your particular scheme, so you have to ask the scheme administrators to find out.

    The answer could be anything from no difference to your pension drops hugely because of the lower part time income. It might be better to leave completely or to leave and start again as a new employee even. Just no way for us to know because we don't know the specific rules.
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