Teachers Pensions - AAB

Misterhelpless

New here, so hope someone can help!
I'm in the Teachers Pension Scheme (final salary). I'm deciding to take Actuarially Reduced Benefit early retirement from my job, two years before 60 my NPA. I've used the on-line calculators the TPS provide and I've doubled checked using the Actuarial Factors published. All looks OK.
My question is this:
I get an annual Statement of Benefits from the TPS each 31 March. Meanwhile, to find my AAB pension I need to calculate the likely final salary at 60, and back track from there using their calculator sliders. Does the AAB figure equate to the Annual Benefit Statement figure? For the sake of argument say I chose to leave 31 March this year, would my AAB pension equal the Estimated Pension amount in the Annual Benefit Statement of 31 March? The reason I ask is the TPS in the Annual Benefit Statement don't really make the purpose or the nature of the estimated pension figure clear. Why estimate the pension at that point, unless it is actuarially factored? In other words, can I rely on the actual Benefit Statement estimated pension as being pretty close to what I would get in AAB at that point (31 March)?
I have read extensively around the topic, and can't find anything that tells me if the Annual Statement estimated pension is a sum using the AAB factors that makes the assumption no major change will occur on the salary, etc. Hope this question is not too confusing!
Thanks

jem16

Misterhelpless wrote: »

My question is this:
I get an annual Statement of Benefits from the TPS each 31 March. Meanwhile, to find my AAB pension I need to calculate the likely final salary at 60, and back track from there using their calculator sliders. Does the AAB figure equate to the Annual Benefit Statement figure? For the sake of argument say I chose to leave 31 March this year, would my AAB pension equal the Estimated Pension amount in the Annual Benefit Statement of 31 March?

No it doesn't. Your benefit statement simply shows your current salary times your current service. There is no reduction factored in.

Also remember that your pension will be worked out on either your final salary or the average of the best 3 years out of the last 10 years, whichever is higher. At the moment it's not the final salary which is higher. My calculation done just over a year ago used a salary which was approximately £3k higher than my final salary.

Misterhelpless

Thank you for your help. I thought it was going to be something like that. Like you my 'final' salary is more than I am currently earning because of some bonuses a year or two back.

System

It is nothing to do with bonuses. It is because the salary is uprated for inflation.

hyubh

excelpaul wrote: »

It is nothing to do with bonuses. It is because the salary is uprated for inflation.

Why is it necessarily nothing to do with bonuses - are such things always non-pensionable under the final salary TPS? If they are not, then surely they may be a factor.

jem16

hyubh wrote: »

Why is it necessarily nothing to do with bonuses - are such things always non-pensionable under the final salary TPS? If they are not, then surely they may be a factor.

They may be a factor but they are not, in themselves, the cause of it. The TPS takes the last 10 years and uprates each year for inflation. It then calculates the average of 3 years and looks to see which is best compared with actual final salary.

So basically the year with the bonus may not be part of the best 3 years although it obviously could.