Teachers' Pensions - given up trying to understand.

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hugheskevi wrote: »

In a surprisingly large number of cases, the new schemes are more beneficial than the old schemes for members very close to retirement.

Which it would be for me*, I'd get the best out of of both, so it is obvious they won't permit it :rotfl:


*Simples: the career average is designed to pull the pensionable amount down using the low starting salary, which is why the factor of 1/57 appears very generous over the old 1/80 of your highest (usually final) salary.

saver861

hugheskevi wrote: »

Compulsory - Schedule 7 of Public Service Pension Act 2013 covers this.

In a surprisingly large number of cases, the new schemes are more beneficial than the old schemes for members very close to retirement.

In virtually all cases CARE will be better for those at the top of their career heading towards retirement, even perhaps for those a little further away.

Its the younger high flyers that will suffer the biggest negative impact of CARE.

hugheskevi

In virtually all cases CARE will be better for those at the top of their career heading towards retirement, even perhaps for those a little further away.

This is true, other things being equal, about CARE vs final salary structure

But in public service pension reform other things are not equal, and those moving from normal pension age 60 to a normal pension age equal to State Pension age are likely to be worse off in the career average schemes even if they are at the top of their career, unless they are quite close to retirement.

But it is complicated by things such as low salary increases, revaluation of final pay for active members, etc, which makes it quite hard to generalise too widely.

saver861

hugheskevi wrote: »

But in public service pension reform other things are not equal, and those moving from normal pension age 60 to a normal pension age equal to State Pension age are likely to be worse off in the career average schemes even if they are at the top of their career, unless they are quite close to retirement.

There will be an optimum point where the further you are from retirement the more you go into negative territory in terms of CARE. Many will have had the advantage of some years on the older system so it will depend on the combination.

Certainly it would be wise for those nearing retirement to weigh up the options and how much they may have shortfall as opposed to the old scheme.

hugheskevi wrote: »

But it is complicated by things such as low salary increases, revaluation of final pay for active members, etc, which makes it quite hard to generalise too widely.

Absolutely. And it will take a decade or two before it starts to smooth out - though it will be less beneficial in the long run for most with developing careers.