Teachers' Pension Scheme

jem16 · 3 November 2014 at 5:46PM

Minrich wrote: »

She would be better off taking her pension and then getting another teaching job .

She could get another teaching job but she would only be able to work a set amount before it would affect her pension and may even stop it altogether.

She is not benefiting from her extra pension contributions as they are 9.6% of her salary and her pay would have only increased in the last 2 years by 1% like all public sector workers , so not worth it .

She will be benefitting from her extra contributions as she has not yet reached the maximum of 45 years. With 5 years extra service possible and on an HT's salary, this could easily see her with around £2800 extra each year for the rest of her life.

Her pension will only be taxed and no nat insuarance . Her new job will pay full tax and nat ins .

The lady is 62 and already past state retirement age so will not be paying any NI whilst working.

There will be a need to have a gap between retiring and getting another job due to tax implications .

What tax implications?

The problem is not tax related but related to the rules of the TPS and teaching.

Minrich wrote: »

But she should have stopped paying pension contributions at 40 years , she is wasting her money as she does not increase her pension (apart for her slight pay rises) . If she is a head teacher then she will be wasting quite alot of money . Police officers stop paying if they are on the 1987 scheme at 30 years as they get no increase in pension benefit by doing so , police is the best year in last 3 years to base their pension on .

Why quote Police Pension rules when they are not the same as the Teachers' Scheme?

As has already been stated, 45 years is the maximum and 5 years extra service can be accrued.