Confused about trivial commutation

Marcon

lookstraightahead said:

Marcon said:

lookstraightahead said:

I've come out of my teachers pension as it will be worth so little when I retire. I'm 56 and I have been given a quote that I can take out just over £10k (thus is all of it). I gather a small pot is something under £10k so I'm a few hundred pounds too much for that. 

I don't understand the trivial commutation rules / £30k rules. Is this per year or total of all other pensions? I've 'cashed in' a £40k pension earlier this year. Leaving it in isn't worthwhile to me as it will give me about £50 a month pension.

Small pots is a concept which relates only to defined contribution pension schemes. TPS is defined benefit.

A DB scheme can be 'trivially commuted' if:

• the total capital value (as opposed to just annual payments) is under £10K; OR
• the total value of all your pension provision (ignoring state pension) is under £30K, including any you've already drawn/cashed in. You've already cashed in a £40K pension, so clearly you are way over the £30K limit.

So you can't trivially commute. 

How long a period of active (contributing) membership of the TPS did you have?

Less than two years 

See https://www.teacherspensions.co.uk/-/media/documents/employer/factsheets/leaving-pesnionable-employment-v15-0315.ashx?rev=77ee0aae73fe4c65acb98c85f730cd7f&hash=33E623AD60710206A8D3F200D3C595A6

As you don't have two years of pensionable service in the TPS, you can ask for a refund of your own contributions (which will be paid minus tax, and won't reflect any employer contribution); or transfer to a DC pension scheme - a much better option in financial terms, since transferring will mean you get a chunk of cash from the employer included.

xylophone

Less than two years 

Are you sure of this?

https://www.teacherspensions.co.uk/members/working-life/paying-in/payments-refunds.aspx#:~:text=If you have less than,National Insurance will be made.

Have you checked with the Administrator that you would be permitted to transfer to a DC Scheme?

Silvertabby

xylophone said:

Less than two years 

Are you sure of this?

https://www.teacherspensions.co.uk/members/working-life/paying-in/payments-refunds.aspx#:~:text=If you have less than,National Insurance will be made.

Have you checked with the Administrator that you would be permitted to transfer to a DC Scheme?

Yes - all public sector benefits may be transferred to DC schemes as long as they haven't met the vesting period (2 years/no transfers in) as they haven't accrued actual pension rights.  (But note that there may be a time limit on the transfer). 

The fun starts when they ask a DC scheme to accept a transfer in from a public sector scheme, and a junior administrator tells them "The computer says no".........  

xylophone

Yes - all public sector benefits may be transferred to DC schemes as long as they haven't met the vesting period (2 years/no transfers in) as they haven't accrued actual pension rights.  (But note that there may be a time limit on the transfer). 

I knew about the two year rule but I am speculating on whether the OP is correct in saying that she was in the scheme for under two years.

I am wondering whether she does in fact have a deferred pension in the scheme, possibly aggregated from separate periods.

I had a quick look back over some much earlier posts where she refers to an old TP pension but it appears that she may also have

service from a later period.

I think that it would be worth a call to the Administrator just to be sure of the situation.