Help understanding Scottish Teachers Pension Scheme

rmunrohfc

Hi all,

I am interested in understanding exactly how my pension scheme works. I've just been automatically enrolled in the Scottish Teachers Pension Scheme 2015.

As I am new to this I don't understand what it is I actually get out of it in the end, and how that is linked to my contributions (and my employer's).

My accrual rate is 1/57 plus 1.6% and the annual pension increase. However my annual contribution is 9.2% (my employer's is 17.2%).

So what I'm confused about is that if I'm contributing 9.2% of my annual salary that works out as £3,395 over the course of a year, but according to the accrual rate thing my pension would only be £659.04 per year. So, which is the correct figure - or is it both added together? How do my employer's contributions play into this?

I'm obviously reading this wrong, but if my contributions are far greater than what I get out of it, then what it the point?

Any help appreciated!

Robert

jem16

rmunrohfc wrote: »

So what I'm confused about is that if I'm contributing 9.2% of my annual salary that works out as £3,395 over the course of a year, but according to the accrual rate thing my pension would only be £659.04 per year. So, which is the correct figure - or is it both added together?

The correct figure is £659.04pa but what you are forgetting is that you are paid that for the length of your retirement. Let's say that is 20 years. 20 times £659.04 is £13,180.80. So for a contribution of £3395 you're getting back £13,180.80.

Obviously the longer you live ( and your spouse ) the more you gain.

How do my employer's contributions play into this?

They don't make any difference to what you get but obviously their contributions are paying in part for your benefits.