Teachers pension

Matt_22

Hi, can I ask how good the teachers pension is seen as being. I have a new job offer that is teachers pension. Thank you

tacpot12

It's good pension because it is a defined benefit scheme. If you spend all your working life in the scheme  it will pay you at least 2/3rd of your final salary and should be linked to the rate of inflation. It's a good scheme, but it will always be worth paying a bit extra if you can afford to do so to give you flexibility later. If you are only working part-time, it's more important that you contribute more.  

Marcon

tacpot12 said:

It's good pension because it is a defined benefit scheme. If you spend all your working life in the scheme  it will pay you at least 2/3rd of your final salary and should be linked to the rate of inflation. It's a good scheme, but it will always be worth paying a bit extra if you can afford to do so to give you flexibility later. If you are only working part-time, it's more important that you contribute more.  

It's not a final salary scheme now - it's a CARE scheme and builds up benefits at the rate of 1/57 for each year of service.

OP, that's still a fab deal and grab it with both hands! CARE is Career Average Revalued Earnings, so as Tacpot says, a 'defined benefit' pension which is a real rarity these days...

Silvertabby

Matt - look at the answers you were given when you were considering opting out of the LGPS.  TPS is a similar scheme.

Matt_22

Thanks yes I just wondered how compared to the lgps. I believe the teachers pension is cross linked to inflation plus 1.9 percent

Marcon

Matt_22 said:

Thanks yes I just wondered how compared to the lgps. I believe the teachers pension is cross linked to inflation plus 1.9 percent

I wouldn't worry too much about comparisons. It's a 'diamonds v gold' - ie both brilliant.

Dazed_and_C0nfused

Matt_22 said:

Thanks yes I just wondered how compared to the lgps. I believe the teachers pension is cross linked to inflation plus 1.9 percent

It looks like it's 1.6% above CPI, not 1.9%.

Each scheme has its own rules and some bits will be better or worse than others.

Take someone earning £35k in LGPS or TPS

TPS contribution rate is 8.6%.  Accrual rate is 1/57th and revaluation CPI + 1.6%

LGPS contribution rate is only 6.5% and you accrue 1/49th but the revaluation rate is only CPI.

So in TPS you contribute more to accrue less.  But it revalues at a higher rate.

Matt_22

So there roughly both as valuable as each over

Silvertabby

Just out of curiosity - what will you be doing in your new job?

JoeCrystal

Matt_22 said:

So there roughly both as valuable as each over

Yes, and just like the LGPS scheme, the TPS has a website for understanding how it works. Here is the link to start you off. https://www.teacherspensions.co.uk/members/new-starter/what-is-a-teachers-pension.aspx

After all the discussions and answers you got previously, you should already understand how it works and compares. You are comparing apples to apples. Some aspects of them are slightly shiner, but they are still apples.

Matt_22

Thanks it's similar to the lgps. In a sense you could value it as an extra 9k on your salary