Should I transfer from TPS to NHS Pension?

wayneghall

Hi, I have recently joined the NHS and look to transfer my TPS over.

I have 22 years service in the TPS (16 years in final salary, the remainder in CARE). The valuation of the NHS scheme will buy me 17 years in 2008 section 1995/2008 and 6 years in CARE. My salary is greater in the NHS than it was when teaching.

Should I transfer?

wayneghall

I've just rang them and they've said that I will still be able to retire at 60 as I'm in the "2008" section but according to the information I've read on their leaflet it's 65. Now I'm confused, if they are offering contradictory information.

ChocolateWombat

All I’d say is remember the McCloud judgement means that if you were teaching in 2012 and continued beyond 2015, any service before €pril 2022 will have the option to be final salary rather than career average.  Therefore, the TPS might give you more at 60 than you think and your TOS statement shows.  It’s worth checking that the period from 2015-2022 which is the McCloud period, if transferred can also be final salary or if you. Lose that aspect for hothouse years by transferring you might be worse off.

Everyone is CA now in both NHS and TPS.  Is it. Worth leaving TPS where it is and having the CA from now in NHS?  Hopefully then you will get a sizeable pension at 60 from TPS which would enable you to retire before 67/8 and then get more from NHS at 67/8 along with State Pension.

Im sure someone who knows more about these particular transfers will be along.

hyubh

wayneghall said:

I've just rang them and they've said that I will still be able to retire at 60 as I'm in the "2008" section but according to the information I've read on their leaflet it's 65. Now I'm confused, if they are offering contradictory information.

Is 'them' NHS pensions or Teachers...? When you say that you are 'in' the 2008 section, that would seem to imply the TPS - since as a new joiner you will be 'in' the 2015 section of the NHS scheme. However, the question should be directed towards the NHS scheme, I would have thought.

A Club transfer in of 16 reckonable years for a credit of 17 would be broadly consistent with the NPA of the receiving scheme (for final salary benefits) being higher than that of the previous scheme. I'll be honest I don't know 100% the NHS scheme, but if this were the LGPS, a Club transfer in involving final salary benefits would come in as NPA 65. So 65 will be consistent with that as well.

Should I transfer?

Purely on what you've said, yes, on the assumption your final salary in the NHS will be higher, discounting inflation, than your final salary in the TPS. (The greater reckonable service is neither here nor there, it's to reflect overall benefit structure differences.)

With respect to McCloud, the government have said the 'deferred choice underpin' (DCU) will apply equally to Club transfers. So the decision to transfer remains with a 12 month time limit, however the proportion of final salary and CARE benefits converted into equivalent final salary and CARE benefits in the new scheme is decided by the member on retirement.

wayneghall

Thank you both. "them" refers to the NHS scheme.

I'm thinking of leaving the money with TPS. At least I can draw part of it at 60. The NHS has too many unknowns I think?

hyubh

wayneghall said:

Thank you both. "them" refers to the NHS scheme.

I'm thinking of leaving the money with TPS. At least I can draw part of it at 60. The NHS has too many unknowns I think?

Wanting to draw the earlier part at 60 without drawing the other parts of your pension with higher NPAs would be a reason to keep separate, yes. The 'con' would be, assuming your NHS salary keeps up with inflation, the fact it is already higher than your leaving TPS one means you are not maximising the value of the earlier pension were you end up not drawing anything at 60.

So, for example, if you transferred then retired at 65, your transferred in final salary benefits would have no actuarial reduction and be higher because of the higher NPA (65 not 60, hence the improved reckonable service credit) and be higher due to the higher final salary used. This might well more than offset the negativity of having to take your CARE benefits at the same time and therefore 'early' (assuming that's how the NHS scheme works - I'm not entirely sure to be honest, different public sector schemes can differ on that point).

Dazed_and_C0nfused

This is almost like a McCloud type choice and I suspect a lot of people would rather have the smaller pension at age 60 rather than a larger amount at 65/67/68.