CETV for Teachers Pension

clg1

Hi
I need a CETV figure in order to be able to sort out finances involved in our separation.
Teachers Pensions are not giving out figures at the moment.
'Until such time as the Actuary is able to advise the effects of the revised guidance on factors in use for calculating CETVs, we have been instructed by the DfE to suspend calculation of CETVs with immediate effect.'
Is there any way I can work out or obtain a rough estimate? In the first instance I just really need to know if the 2 pensions are similar or wildy different.
Any help you can give would be gratefully appreciated!
Thanks!

philip1988

As you will be aware the teachers’ pension scheme is a final salary scheme. To find out what the pension is currently worth sign into “my pension on line” on the teachers’ pension website to access your pension statement. At this time of year you will probably find that they haven’t yet updated the system with the 2011 tax year figures. It goes without saying that the pension value goes up with each additional years teaching/salary increase.

hugheskevi

As an extremely rough estimate, you could use the Additional Pension modeller for the scheme.

Enter your details, work out what lump sum would be necessary to buy £1,000 of annual benefits given your characteristics and Normal Pension Age, then multiply up to whatever your pension actually is.

A very crude method, but as a starter for 10 it is probably the easiest method.

Alternatives are to apply a simple scaling factor to the annual amount you have. If you are close to age 60-65, then 20 would be a decent multiplier (based on annual allowance assumptions). If you are close to age 48, then 16 would be a good multiplier (based on calculations done by Treasury to set DB multiplier for annual allowance).

clg1

Thank you for replying!

I tried the Additional Pension Modeller and obtained a value that would give roughly what my pension would be from contributions up to Sept '11 (limit of the on-line service).

How rough would you expect this method to be? Obviously ignores the last 7 months, but if I had an uptodate service/contributions value, would using the APB calculator be fair?

With the scaling factor method - is that a case of taking what my pension would be from contributions to dates, and multiplying that by 16? I'm under 40. i.e. ~£2000 per annum x 16 = £32,000. The APB method suggests around £24,000.

Again thank you very much for your suggestions - I would never have thought of these!!!

hugheskevi

How rough would you expect this method to be? Obviously ignores the last 7 months, but if I had an uptodate service/contributions value, would using the APB calculator be fair?

Not got much of a feel for how accurate - intuitively, I would expect that if anything it would give an over-estimate as CETVs should be based on conservative assumptions. Having said that, the assumptions used for Added Pension are quite cautious, as they should be for CETV, so it may actually not be too far off.

I think using the APB as a way to get capital value is fair - it basically works like a CETV in reverse and is based on similar uprating, etc, so deviation should mostly come from different discount rates (which are always a topic one can debate the merits of endlessly anyhow!).

With the scaling factor method - is that a case of taking what my pension would be from contributions to dates, and multiplying that by 16? I'm under 40. i.e. ~£2000 per annum x 16 = £32,000. The APB method suggests around £24,000.

Yes. The Government Actuary Department's advice when the annual allowance was changed a couple of years ago included (page 20):

if current age were 42....the valuation factor would be 13.7

So taking the £2,000 used above, multiply by 13.7 (an overestimate, as you are under 40 and 13.7 is based on a 42 year old, but the GAD report doesn't give any figures below age 42) gives £27,400.

That looks very similar to the APB method, which is reassuring.

I'd emphasise that this is all rather back-of-a-fag packet, but as a initial estimate it should be okay.

NewTeacher

I am a 34 year old who has just become a teacher and am looking to transfer in £20,000 of occupational pension to the teachers scheme. I wondered how the transfer-in value would be calculated, as I can't find any details online. Would the number of years service credited depend on my starting salary? Would they calculate it in the same way as transfer out values? If so, might the Additional Pension Benefit be a good way of roughly approximating this? Thanks for your help - am a bit lost!

xylophone

http://www.teacherspensions.co.uk/public/resources/~/media/Files/Documents/Forms/Transferinv10.ashx
Get a quote?

jem16

NewTeacher wrote: »

I wondered how the transfer-in value would be calculated, as I can't find any details online.

It will all be calculated on how many years it is felt it would buy in the Teachers' Scheme. That depends on what the last pension offered compared to what this pension offers.

If the last pension was also a public sector pension it could belong to the public sector transfer club which can make it easier. Where was your last pension?

NewTeacher

thanks for the link - I'd seen this, but just wondered if there was a quicker way of estimating it first.

NewTeacher

jem16 - the old pension is a defined contribution scheme in the private sector, so I know the transfer value will be around 20k, just wondering how they work out how many "years" this buys me. thanks!