Teachers Pension - terminal diagnosis only 40 how do we navigate the pension process

Dixi64

Hi
I hope someone has experience of Teachers Pension as I am looking for advice for my 40 year old niece. She has been teaching for 17 years. She was diagnosed with a brain tumour in March 2022. She has not been able to return to her school since the diagnosis and her wages stopped in May 2023 - although she is still 'employed' by the school. A scan in mid December identified that the tumour had intensified and her prognosis is now terminal with a life expectancy of 2 months although this may be extended to 8 months if the new chemo tablets work. As you can imagine the family are devastated. Her husband is her childhood sweetheart - they have been together since they were 14. They have 3 young boys 10, 8 and 3. In the heat of all this devastation and sorrow they have somehow got to deal with the practicalities and navigate the whole 'in-service death benefit' vs 'ill health retirement'.

The unions advice was simply for them to reach out to the head and see if the school will put her back on full pay so that when 'it' happens she would be entitled to the full in-service death grant. In all honesty the way the head teacher has behaved it is most unlikely that this would be an option and tbh I'm not entirely sure if he could even do this if he wanted to. Thoughts?

Teacher pensions say - You need to ascertain what your options are. If you’re on a period of extended sick leave you need to clarify your status in the Scheme. Please note that if you go on to unpaid sick leave, for the purposes of the death grants payable by the Scheme you’ll be considered as remaining "in-service" for a period of 12 months after this (even though you’re in non-pensionable sick leave as you’re receiving less than half your usual pay). But after 12 months have elapsed you’ll be treated as "out-of-service".

This is important as there can be significant differences in your entitlement when comparing an "in-service" death grant to serious Ill-health lump sum (see below) to an "out-of-service" death grant. We recommend that you discuss this with your employer and / or an independent financial advisor before making a decision on what’s best for you and your family.

The whole pension calculation process is so complicated and they just don't know where to turn. I would really like to help them through this but even I am finding it incredibly difficult to understand. 

Sorry for the long post but any advice would be gratefully received - thanks in anticipation.

El_Torro

Very sorry to hear about this terrible situation.

Unfortunately I know next to nothing about teachers' pensions so can't give any useful advice. Has someone spoken to the pension administrators? To understand what the difference is between the in-service payment and out-of-service payment at least.

Dixi64

El_Torro said:

Very sorry to hear about this terrible situation.

Unfortunately I know next to nothing about teachers' pensions so can't give any useful advice. Has someone spoken to the pension administrators? To understand what the difference is between the in-service payment and out-of-service payment at least.

According to Teacher pension ...  

If you’ve a life expectancy of less than a year (which will need to be certified by a ‘registered medical practitioner’ or ‘someone with equivalent overseas qualifications’ as part of the Ill-health application process), your Ill-health pension can be fully converted to a lump sum payment – known as a serious Ill-health lump sum. You must ask for this when you apply for Ill-health benefits, because a pension can’t be converted to a lump sum once it has come into payment. The lump sum payment will be approximately five times the pension you would be due plus the maximum lump sum after commutation of your pension.

If you apply for and receive such a lump sum payment, then this extinguishes your pension in the Scheme. A pension would still be payable to a qualifying adult or child beneficiaries upon the event of your death.

NlghtOwl

If she can’t work then it’s out of her control what the head does. She could apply for ill health retirement but quite a bit of stress sorting the forms out. Monetary difference between 'in-service death benefit' vs 'ill health retirement' lump sum is probably not worth agonising over. I’d definitely consider not cashing the whole pension under serious ill health as the spouse dependants pension is worth keeping at their young age to provide regular income to support the family. 

xylophone

I’d definitely consider not cashing the whole pension under serious ill health as the spouse dependants pension is worth keeping at their young age to provide regular income to support the family. 

But post above says

If you apply for and receive such a lump sum payment, then this extinguishes your pension in the Scheme. A pension would still be payable to a qualifying adult or child beneficiaries upon the event of your death.

xylophone

The whole pension calculation process is so complicated and they just don't know where to turn. I would really like to help them through this but even I am finding it incredibly difficult to understand. 

I wonder would this latest guide help?

https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/managing-your-pension/ill-health-retirement-factsheet.ashx?rev=b1260260fcc64878a97dd85536cd09f8&hash=59525C24007F1CD7113B1094BF39A9D7

Your niece and her husband are in a very sad and very difficult situation - the Guide above is presented in clear, large text and has an annexe on the short life expectancy situation.

Kynthia

Maybe ask the union for their pension expert to urgently assist her application for a serious ill-health lump sum. It could make a big financial difference to her family if they're not going to qualify for a death-in-service lump sum. This needs to be applied for urgently and chased up once submitted.

I'm so sorry this is happening. I lost a friend to a brain tumour who wasn't much older.