Teachers Pension

boltonian

Any teachers able to help here.

Trying to work out the hit I would take if I wanted to retire and take my pension at 58.

I currently have 14 years service under the Final Salary Scheme (Pensionable age 60) 
and would have a further 14 years under the Average Salary Scheme (Pensionable at 67)

I understand that I have to take the entire lot at the same time, I was previously planning to take the first but at 60 and use other sources of income until I hit 67 to get the rest.

I've used the calculators on the website, but doesn't seem right to me. Seems much higher than I thought given that I would be effectively leaving the scheme 9 years early.

Also, if I retired at 58, can I not touch the pension until 60 or do you have to take it as soon as you retire?

Bluebell1000

Funnily enough I went to a teachers pension presentation this afternoon 😁 I'm assuming you are in TPS. Different schemes may have different answers...
Here is my understanding from what they said:
If you take your first pension at 60 (NPA) you can delay taking your second pension if you want.

If you take your pension before NPA you need to take both, and take the reduction they apply.

If you quit work at 58 and live off savings, you would be able to leave the pension until NPA if you want, you don't have to take it when you leave work.

Finally you may come under a special adjustment thing, where up to Apr 22 they will have to offer you the choice of final salary or career average for all pension accrued to that point. So you may find you have more final salary than you are expecting. Probably best to speak to them about it if it would help your decision making.

Actually one more thing - they said apply 3-4 months before you plan to take it, so there's time to process your application for it.

boltonian

Thanks, that's helpful.

I'm way off yet, only 45. I have about 13 years in Final salary (60) and 3 in Career average (67).

I moved to an independent school that came out of TPS, which I'm fine with. But just trying to work out the pros and cons of going back into state before the 5 year threshold at which I would effectively start my TPS again.

I would have enough in my none TPS pension to retire at 58 and not touch TPS until 60, which would be the plan if I went back into state. If I stay in the scheme I am in now, I wouldn't touch TPS until I reached 67. 

I just can't work out which would be best. Obviously going back into TPS would leave me better off if I lived to be 100. But I play to spend everything I can from 58-70. After that, I couldn't care less, in some ways rather have less left.

Do you know roughly how much you lose each year you take your 67 TPS early? Read about 4%, but looked at the spreadsheets that help you to work it out and don't have a clue

Dazed_and_C0nfused

With that many years of DB pension it would be sensible to check your State Pension forecast on gov.uk.

Read past the headline figure to see what you have accrued so far and what impact stopping work might have.  If needed voluntary contributions are usually a good investment

Bluebell1000

They said 5 years early was about 20% reduction - the example they gave was a £20k per year pension going down to £16k per year. If it's roughly an equal deduction each year, that suggests about 4% for each year which is the number you have as well. So 7 years early to take it at 60 is potentially 28% total deduction? 

Dazed_and_C0nfused

Dazed_and_C0nfused said:

With that many years of DB pension it would be sensible to check your State Pension forecast on gov.uk.

Read past the headline figure to see what you have accrued so far and what impact stopping work might have.  If needed voluntary contributions are usually a good investment

Scrap that, didn't realise you were that far off 58!

cobson

There is this document that details how to calculate the reduction for early retirement:

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/early-retirement-factors-july-2019.ashx?rev=d6cab9a4c33b4715880a5731014002b3&hash=B8D6AACCFF42EAB0FB60AACCE8F56EE6

e.g. if you take the 67 scheme early at 60, it is subject to both the standard reduction of 0.94 and the factor of 0.779 from table ER7 for a total reduction of 0.73226 i.e. just under 27%.

boltonian

Dazed_and_C0nfused said:

With that many years of DB pension it would be sensible to check your State Pension forecast on gov.uk.

Read past the headline figure to see what you have accrued so far and what impact stopping work might have.  If needed voluntary contributions are usually a good investment

I have no idea what that means? What does this mean for state pension?

boltonian

Dazed_and_C0nfused said:

Dazed_and_C0nfused said:

With that many years of DB pension it would be sensible to check your State Pension forecast on gov.uk.

Read past the headline figure to see what you have accrued so far and what impact stopping work might have.  If needed voluntary contributions are usually a good investment

Scrap that, didn't realise you were that far off 58!

(Note to self) Read all replies before replying

boltonian

Bluebell1000 said:

They said 5 years early was about 20% reduction - the example they gave was a £20k per year pension going down to £16k per year. If it's roughly an equal deduction each year, that suggests about 4% for each year which is the number you have as well. So 7 years early to take it at 60 is potentially 28% total deduction? 

Bluebell1000 said:

They said 5 years early was about 20% reduction - the example they gave was a £20k per year pension going down to £16k per year. If it's roughly an equal deduction each year, that suggests about 4% for each year which is the number you have as well. So 7 years early to take it at 60 is potentially 28% total deduction? 

Thanks.

That would be fine. I could probably put off getting the (67) pension until I was maybe 62 or 63. I could live with that.

If I went back to state, it would be an increased salary so would boost both pots anyway, so can take the hit. I might even pay into the Prudential scheme which might let me keep the 67 pension in until a little later

Bluebell1000

The Pru AVCs is my plan for retiring earlier (I'm in the 65/68 retirement age band for my pensions), hoping to use that plus savings for a few years to delay taking the TPS funds until close to 65.