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Teacher pension scheme options

Options
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Comments

  • GAry
    GAry Posts: 25 Forumite
    Seventh Anniversary 10 Posts
    tigerspill

    I don't know if they are identical.

    I would be surprised if they are not, it would be hard to justify making them (significantly) different.

    cobson posted this:
    https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/miscellaneous/understanding-scheme-changes/understanding-which-member-type-you-are-factsheet.ashx

    I have sent this to NITPS in Londonderry. We are awaiting a reply - they might say that this is the GB scheme and different ?? I'll keep you updated.
  • GAry wrote: »
    tigerspill

    I don't know if they are identical.

    I would be surprised if they are not, it would be hard to justify making them (significantly) different.

    cobson posted this:
    https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/miscellaneous/understanding-scheme-changes/understanding-which-member-type-you-are-factsheet.ashx

    I have sent this to NITPS in Londonderry. We are awaiting a reply - they might say that this is the GB scheme and different ?? I'll keep you updated.

    Thank you.
  • GAry
    GAry Posts: 25 Forumite
    Seventh Anniversary 10 Posts
    Hello tigerspill, cobson, et al,

    We just got a reply from the November email sent to NITPS.
    It has (finally) been confirmed that "if you are out of service you can claim your NPA 60 and CARE pensions separately. This applies to all members irrespective of type i.e Tapered/partial or Transitional"

    As previously discussed, the earlier communications from NITPS were originally stating this was not possible.
  • louby40
    louby40 Posts: 1,598 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    It's total minefield! I'm a fulltime teacher, I'm 51 and have been teaching since 1996 so am a transition member. I desperately want to retire at 60. My NRA is 67. I really don't want to work until then. I plan to sell my house and downsize (mortgage will be paid by then) and use the equity to supplement my pension. I think I need to speak to a pension/financial advisor to work out my actual payout. I did pay AVC's for a couple of years and have a very small local government pension which I can get at 60.
     Advice from various people seem to contradict each other!
  • There are numerous calculators on the TPA web site.

  • louby40
    louby40 Posts: 1,598 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    There are! And I'm a frequent visitor to the TPS website but when your pension is in 2 halves it's a little more complicated! 
  • tigerspill
    tigerspill Posts: 837 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    edited 23 February 2020 at 3:33PM
    GAry said:
    Hello tigerspill, cobson, et al,

    We just got a reply from the November email sent to NITPS.
    It has (finally) been confirmed that "if you are out of service you can claim your NPA 60 and CARE pensions separately. This applies to all members irrespective of type i.e Tapered/partial or Transitional"

    As previously discussed, the earlier communications from NITPS were originally stating this was not possible.
    They are a disaster.  How can it take three months to respond.
    The next question I have for them (My wife will be emailing tomorrow) is whether the actuarial reductions for early retirement are the same as the England/Wales TPS.  Hope they dont take three months to get back.

    Re. taking the FS and CARE separately - I believe you can only do this once you have reached NRA for the FS scheme (60 for pre 2007 joining dates and 65 after 2007).
  • Offhand, seems to me that its preferable to have a personal pension of whatever type*, outside the TPS, for more flexibility in various dimensions - fund choice, charges, dates when you take it, different admin, if you are dissatisfied you can move it, less likely to be messed about with by yoir employers at a later date.



    * LISA, personal, SIPP
    I agree with this.
    I often consider making extra payments into the tps, but just can't see the value. Once your tps value exceeds your annual expenditure, it seems more beneficial to me to have the flexibility of lisa/isas/sipps.

    Plus, the tps only increases in value by cpi + 1.6%. The 1.6% doesn't apply to apb.
    Every time i look at a compound interest calculator, it always seems i'll be strongly better off chucking the money in a global equity tracker.
  • Plus, the tps only increases in value by cpi + 1.6%. The 1.6% doesn't apply to apb.
    But it applies to faster accrual, which is, in fact, much more expensive than additional pension benefits
    Oliver1191 said:
    Every time i look at a compound interest calculator, it always seems i'll be strongly better off chucking the money in a global equity tracker.
    It seems you are making some confusion. You cannot just compare inflation + 1.6% vs how much the stock market has gone up, and conclude that you're better off with an equity tracker.
    The TPS gives you an annuity; in order to compare that with an equity tracker, you'd need to know how much it would cost to buy a comparable annuity.

    E.g. let's say that you are 30, the retirement age (for now) is 68 and buying £1,000 of additional pension (which will increase by inflation and nothing more) will cost you £7,000. If annuity rates are 3.5% in 38 years (i.e. £100k buys £3.5k), then you need to solve for:

    7,000 x (1+i)^38 * 3.5% = 1,000
    (1+i)^38=1/7/3.5%
    i = 3.77%

    where i is the real, i.e. after inflation, return of investment. I.e. if those £7k can yield 3.77% after inflation taxes costs etc, then you're better off not buying the additional pension and investing elsewhere.

    Of course no one has a crystal ball and no one can predict where annuity rates will be - but this is the proper comparison.
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