Small Teachers Pension £17 pa

xxdeebeexx

Hi I returned to teaching, a few days a year, after early retirement.
I've just had a note from the Teachers Pension scheme to ask what I want to do with my 2nd pension.
It works out to be a lump sum of £23 and then £17 pa.


What are the possible solutions for this small pension ?
I'm a non tax payer and have a HL sipp (the £2880 recycling and not paid in this year)
I simply haven't a clue.
I will phone the TP on Monday but wanted some suggestions so that I can be less clueless when I have the conversation.


many tia
xxdeebeexx

zagubov

When are you intending to retire again? Are you planning to work for a few more years?

xxdeebeexx

zagubov wrote: »

When are you intending to retire again? Are you planning to work for a few more years?

Thanks for the reply.

I'm not going to teach again but I might do some other form of work in the distant future. (I'm just finding my feet after being a (very) long time carer for my parents)


I'm very aware of loose ends and would like this little bit of pension 'cleared up', but don't know how.


thanks


xxdeebeexx

xylophone

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

See "special rules for occupational schemes" - any chance?

Silvertabby

xylophone wrote: »

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

See "special rules for occupational schemes" - any chance?

Unlikely. If this is his 2nd pension in the TPS, OP almost certainly has exceeded the £30K trivial commutation limit with his main pension.

It can't be transferred out to a non DB scheme for the same reason (total TPS service is over the 2 year limit for a refund/transfer out to a DC scheme).

The figures quoted sound like 25% maximum lump sum option, leaving £17 to be paid as an annual pension - more than likely will be paid monthly along with OP's main pension.

xylophone

OP almost certainly has exceeded the £30K trivial commutation limit with his main pension.

This is one of the "main rules" - but in link above under
"special rules for occupational schemes only" it says

If you have small benefits in an occupational pension, it may be possible for you to cash them in under triviality rules, even if the main rules above have not been met.
The following are the main qualifying criteria:
 You must be 60 or over or 55 or over if taking benefits after 6 April 2015;
 You must not be a controlling director of the sponsoring employer;
 The payment must not exceed £10,000 (before 27 March 2014, the limit was £2,000);
 The payment extinguishes your right to benefits under the scheme; and
 There must not have been a transfer out of the scheme in the 3 years preceding the date of payment

I was wondering whether the OP qualified under these special rules.

Silvertabby

xylophone wrote: »

This is one of the "main rules" - but in link above under
"special rules for occupational schemes only" it says

If you have small benefits in an occupational pension, it may be possible for you to cash them in under triviality rules, even if the main rules above have not been met.
The following are the main qualifying criteria:
 You must be 60 or over or 55 or over if taking benefits after 6 April 2015;
 You must not be a controlling director of the sponsoring employer;
 The payment must not exceed £10,000 (before 27 March 2014, the limit was £2,000);
 The payment extinguishes your right to benefits under the scheme; and
 There must not have been a transfer out of the scheme in the 3 years preceding the date of payment

I was wondering whether the OP qualified under these special rules.

I'm conscious that whilst TPS is very similar to the LGPS, they do have some differences, so I had a rummage. The following quote is from TPS, so it looks like they do apply the same ruling - total value of all pensions (except State) must be less than £30K.

Small Pensions (Trivial Commutation)
If the value of all your pension funds from all sources (excluding State Retirement Pension and any dependents pension you are receiving) is of a ‘trivial’ size and you are aged 55 or over (or if you have a GMP pension payable from the scheme, 60 for women and 65 for men), then you can opt to take all of your pension fund as a taxable lump sum (‘commuted’), with no need to take an annual income. Your pension funds are regarded as ‘trivial’ if they amount to the limit provided by HMRC, which can be found online.

xylophone

Yes - and the £30,000 rule is covered in the link as a "main rule".

However, unless I am misreading, the link appears to suggest that even if the main rule is not met, (for example because the total pensions exceeded £30,000) under the special rules for occupational schemes only, (and if the scheme rules allowed), it might still be possible to take a very small pension as a lump sum?

I don't know the answer but it might be worth the OP's making the enquiry?

xxdeebeexx

Thank you so much for the comments and information.
I plan to call the TP help line tomorrow for further advice. I have absolutely no idea about pensions and wanted some insight before I made the phone call so that I could have a more informed conversation.
I've read through the posts and links a few times and I'm far more informed that I was before.


thanks again


xxdeebeexx

Silvertabby

xylophone wrote: »

Yes - and the £30,000 rule is covered in the link as a "main rule".

However, unless I am misreading, the link appears to suggest that even if the main rule is not met, (for example because the total pensions exceeded £30,000) under the special rules for occupational schemes only, (and if the scheme rules allowed), it might still be possible to take a very small pension as a lump sum?

I don't know the answer but it might be worth the OP's making the enquiry?

By all means ask, but I'd have thought that TPS would have automatically offered such a small amount as a one-off lump sum if it had been possible to take it that way.

Incidentally, the LGPS has a (discretionary) de minimis triviality clause for post 2008 leavers, in that if the total commuted value is less than £10K, then it's payable as a one off lump sum as long as the member has no other LGPS benefits. Comes in especially handy for those with main benefits in the TPS, who accrue a tiny LGPS pension as a lunchtime supervisor, for example.

I don't know if TPS offer this - but it still wouldn't apply to OP if both of his/her pensions are TPS.

jamesd

Silvertabby wrote: »

Unlikely. If this is his 2nd pension in the TPS, OP almost certainly has exceeded the £30K trivial commutation limit with his main pension.

That triviality rule is perhaps irrelevant. The small pot rule can be used instead and a person can use whichever is most beneficial. Provided the scheme rules permit it. And those scheme rules might still use the triviality provisions only.