Teachers' Pensions - given up trying to understand.

jem16

facade wrote: »

Unless I completely misunderstand, leaving the TPS fixes my best final salary years at 2006, 2007, 2008, and calculates the CPI for every year since then

On leaving the scheme your pension would be worked out using those years which would already be updated with the PI factor. From then on till you take the pension it would be updated by CPI.

I can then put the massive contributions into an ISA, or AVC or something.

Have I missed anything?

Depends on what you mean by massive. It will only be your own contributions, not employers.

jem16

saver861 wrote: »

Your pension will be assessed on the best of, final year, last three years or best three consecutive from the last thirteen.

That's not how the TPS is worked out. It's either final year or the average of the best three years in the last ten years.

saver861

facade wrote: »

Also if I stop contributing, then I think cpi applies continuously across all the years. (This is what I need to find out)

If your pension is frozen the index will still be applied at the time of access.

facade wrote: »

My best salary years are 2006,2007 &2008, because they are compounded by the large cpi from those years. (Remember, the "pay rise" has been way below cpi for many years now)

I get the gist of what you are saying but, just looking at it from the top of my head, I can't see how you will gain particularly by coming out.

First off, the rules that applied prior to the CARE changes which came in 2014 I think, will be static. Thus they will work out the portion of your pension to 2014 separately.

The last seven or eight years of your pension will thus be calculated on your CARE for those years. The previous years will still be index linked.

CARE should work better for you as presumably you will be working at or near your final salary for the remaining years. Therefore, you will benefit from CARE also.

Not only that, leaving the pension five years early will lose you five years of indexed pension for life.

I'm not saying your findings are wrong, but purely looking at it face value, I think you need to look into this further before making your decision.

I'm not getting how it can be better to opt out, including the fact that your AVC substitute would be dependent on investment performance etc ... and if you only have five years to go that is probably too short a time to make any effective margin on the investement - thus you could actually lose on the AVC's at the time of access.

saver861

jem16 wrote: »

That's not how the TPS is worked out. It's either final year or the average of the best three years in the last ten years.

Does it not also look at the average of the best three consecutive years from the last thirteen?

In any event, in the case of facade, the changes that came in 2014 means that the previous ten years will be back to 2004 so that portion of his pension will now be worked out for those years, regardless how long he continues to work?

Thus remaining years from 2014 will be CARE so don't impact at all on what happened previously.

jem16

saver861 wrote: »

First off, the rules that applied prior to the CARE changes which came in 2014 I think, will be static. Thus they will work out the portion of your pension to 2014 separately.

Facade won't be on the CARE scheme. Anyone over 50 in 2012 remained on the final salary scheme. Probably intends to retire at age 60 too.

TPS changed to CARE in 2015, not 2014.

saver861 wrote: »

Does it not also look at the average of the best three consecutive years from the last thirteen?

No it doesn't.

hyubh

saver861 wrote: »

Thus remaining years from 2014 will be CARE so don't impact at all on what happened previously.

The subject of this thread, per its subject line, is the Teachers Pension Scheme, not the LGPS. They are different schemes with different rules, and it is not helpful to just assume otherwise when giving advice, as you have now done repeatedly.

Mistermeaner

If the teachers pension scheme is so terrible I hope, as a tax payer, that teachers opt out in their droves and instead start sipps.

jem16

Mistermeaner wrote: »

If the teachers pension scheme is so terrible I hope, as a tax payer, that teachers opt out in their droves and instead start sipps.

It's not terrible but I can see where façade is coming from. Those 3 years meant my pension was calculated on a figure £4k higher than my final salary - that meant an extra £1950pa for me.

Those best 3 years are dropping off the calculations so it could be a good idea but only worth it for those close to retirement anyway.

Pennylane

hA ha this thread (which I've only just scanned through quickly) is making me laugh. People talking about retiring at 55?

Just suck it up! Life's not always fair. That's what women are being told about the state pension mess.

Had I been born 6 months earlier I would be getting a pension now, as it is I'll lose out on around £20,000 but hey, suck it up. :rotfl:

jem16

Pennylane wrote: »

hA ha this thread (which I've only just scanned through quickly) is making me laugh. People talking about retiring at 55?

You can retire whenever you like as long as you have made the appropriate savings/investments.

Had I been born 6 months earlier I would be getting a pension now, as it is I'll lose out on around £20,000 but hey, suck it up

By law you haven't lost anything as you haven't reached state pension age yet.