Pension position advice please

Patrington

Hi

I am looking for some advice regarding my pension position please.

I have decided to take a career break after 20 years of teaching. 

I am just working a few days a week as a casual teacher for the same academy chain but only get paid for the days I work and not in the holidays. I.e. casual contract (when it arrives).

This is something I am doing until I decide what I would like my next step to be - in education or in a different sector.

I previously worked part time and was being paid on the leadership scale. I am now working less days per week and will be on a lesser pay scale.

My pension so far is split into two parts (as the scheme changed in 2015 ). I have 13 years accrued into the final salary pension scheme and the remaining 7 on the career average scheme.

My first question is - as I am still working for the same academy could I and them continue to contribute into my pension. (Note that when I receive my casual contract I will also ask them this question).

However, I am worried that due to less hours and pay this would have a detrimental effect to my pension in the long run. Is this correct?

Secondly, if this is correct and  it is advisable to defer my teacher pension, then could someone please recommend a suitable private pension (or alternative provision) for me to pay into until I know what my next career step is.

I'm also fully paying into a LISA.

Thanks in advance

alco_pop

I don't know about teachers pensions. But for LGPS. So will answer based on that.

The change was in 2014 to the Carer Average from Final Salary for LGPS.

The pre 2014 Pension is passed on your Full time Equivalent pay to date of leaving, or, one of the previous two if higher.

So the lower salary could affect that. However, as you are working for the same employer, you may have a Reduction in pay protection for up to 10 years. This is only for the Final Salary part. Though teachers may or may not have this.

Under the LGPS you could then defer your existing pension and in the new post start a new pot. But you would need to check that.

Patrington

Hi

Thank you for the reply.

As the final salary part of my pension stopped in 2015 (when the career average was introduced) will my current salary definitely still affect this? Or is that based on my salary at the time that schemed closed?

Thanks again 

Dazed_and_C0nfused

There is normally a link to current salary in this situation.

But your actual salary isn't relevant, it's the full time equivalent.  So if you work half a week on a salary of £40,000 you are only earning £20,000 for CARE scheme purposes but have a salary of £40,000 for final salary purposes.

I suspect the teachers scheme is a bit more complicated but the teachers pension website has lots of useful info.

Marcon

Patrington said:

My first question is - as I am still working for the same academy could I and them continue to contribute into my pension. (Note that when I receive my casual contract I will also ask them this question).

However, I am worried that due to less hours and pay this would have a detrimental effect to my pension in the long run. Is this correct?

You can ask, but much depends on how much you are earning and whether you meet the requirements for continued membership of the TPS. Check with TPS how it would impact on any pension you've built up to date.

Patrington said:

Secondly, if this is correct and  it is advisable to defer my teacher pension, then could someone please recommend a suitable private pension (or alternative provision) for me to pay into until I know what my next career step is.

If you aren't eligible for membership of the TPS, but earn enough to qualify for membership of an auto-enrolment scheme, your employer must offer you one - and pay into it if you do. If you simply choose not to stay in the TPS (for whatever reason), then you can't insist your employer offers you an alternative, or that they contribute to a different scheme.

What the LGPS does isn't what matters - you need to be sure what happens to TPS members. See https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/miscellaneous/understanding-scheme-changes/breaks-in-service-factsheet.ashx?rev=08887f31112b418a9746dfcb471e6d14&hash=92D1714DA217BF2742435784398E2D5C for more information - but suggest you get everything clarified in writing.

Sun-Is-Fun

At retirement, you can choose whether your service from 1st April 2015-31st March 2022 is taken as career average or final salary due to the McCloud judgment. For many people, this would probably be the choice of final salary, but it would depend on your circumstances.

The final salary part is based on full time equivalant salary but career average is not - it is exactly how much you earn.

Your pension will be based on your best three consecutive years in your last ten before retirement, so you have quite quite a bit of time if this was recently, but do check by looking at your Teacher's Pension Statement online to find out when this period was. Be careful if you continue to work part time before your best three in ten will disappear and this will lower your your final salary which your pension will be based on. If your best years are going soon, you can opt out of the teacher's pension for a month to create a hypothetical calculation, which will preserve that. Look on youtube for dave fountain who is very good at providing videos about the teachers pension, hypothetical calculations and so forth. Hope this helped a bit. 

Patrington

Thank you, lots of great advice there. I will definitely take another look at the website and at the suggested videos.