Teachers pension Vs people's pension

Matt_22

How much more valuable is a teachers pension as opposed to a people's pension with the employer paying the minimum contribution around 3%

MX5huggy

The employer’s contribution to TP is 28.68% plus the employees contribution of between 7.4% and 11.7% 

While these figures aren’t significant in how much you get out they do give an indication of the cost of providing the benefits of TP. 

Matt_22

Yes I think the TP puts in around £190 a week. Vs my previous private firms £18

Silvertabby

Matt - we've already had this conversation.  Bottom line is:

TP.  Your future self will thank you for joining one of the best, most generous, pension schemes out there.

People's Pension.  Taxpayers will thank you for saving them shedloads of money.

hugheskevi

MX5huggy said:

The employer’s contribution to TP is 28.68% plus the employees contribution of between 7.4% and 11.7% 

While these figures aren’t significant in how much you get out they do give an indication of the cost of providing the benefits of TP. 

The employer contribution rate includes a large element for notional past service deficit (10.6 percentage points), which is of no relevance to the future pension a member will accrue.

The value of newly accruing pension is assessed as 27.6% of pensionable earnings, of which employees pay an average of 9.6%. That gives an Exchequer contribution of 18% of pensionable earnings.

Dazed_and_C0nfused

Matt_22 said:

Yes I think the TP puts in around £190 a week. Vs my previous private firms £18

There is nothing relevant to you that exists like that with TPS.  You get a pension in accordance with the scheme rules.

What @Silvertabby says it all really.

westv

Silvertabby said:

Matt - we've already had this conversation.

I don't understand why the question is being asked again then.

Dazed_and_C0nfused

westv said:

Silvertabby said:

Matt - we've already had this conversation.

I don't understand why the question is being asked again then.

I think the bottom line is the op doesn't really understand the difference between defined benefit and defined contribution pensions.

And as a result gets confused by, amongst other things, the employer contribution amounts.

dunstonh

Noting it is a repeat question and trying to simplify it to a level that is easy to understand, the benefits of the teachers benefits package (pension, sick pay, death in service) would cost you about 30% of your salary on any alternative.   If the other employer puts 30% into the peoples pension, provides employer life assurance and has very good sick pay, then you are getting to a similar ballpark.

Matt_22

Thank you. 

Marcon

Matt_22 said:

How much more valuable is a teachers pension as opposed to a people's pension with the employer paying the minimum contribution around 3%

Vastly.

Dazed_and_C0nfused said:

westv said:

Silvertabby said:

Matt - we've already had this conversation.

I don't understand why the question is being asked again then.

I think the bottom line is the op doesn't really understand the difference between defined benefit and defined contribution pensions.

And as a result gets confused by, amongst other things, the employer contribution amounts.

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics and so some reading on the basics. If nothing else it'll put your mind at rest that TPS is a brilliant scheme - ditto https://www.telegraph.co.uk/money/pensions/private-pensions/defined-contribution-vs-defined-benefit-pension-plan/

Or have a look at this - the article is slightly out of date but it's still likely to be useful reading for you: https://www.thisismoney.co.uk/money/pensions/article-9737111/The-great-pension-divide-private-public-sector-workers.html