Teachers' Pension Scheme - take it now at 57 or as a deferred member at 60?

Morgan-Green

cantbelieveit23 said:

I took my pension at 58, having studied the figures.  In my case, it allowed me to pay off our mortgage 3+ years early, and in any case, it would not have been possible to live off just my wife's income as neither of us was of state pension age.  Certainly if your wife can use her pension (especially the lump sum) for financial benefit, it would be good to take it asap.  It would provide a decent pot for investment, as well.  As has been mentioned, the annual pension is based on drawing for around 25 years, and few people can predict exactly how long they will live to enjoy it.

That's a good place to be. We are also fortunate enough to be debt-free as of earlier this year 

My pension (Universities DB scheme, taking it from March next year) can keep us going until her NPA of 60 rolls around in 2028, so it's really a case of trying to ascertain whether it's better for her to take the pension now or delay and take it as a deferred member at 60 (i.e. which set of factors have a bigger negative impact on her pension).

Another question I have thought of is whether TPS allows members to convert lump sum to annual pension?  I know my scheme does, but can't see anything on the TPS site to suggest it is possible. Anyone know?  

Sarahspangles

Morgan-Green said:

Another question I have thought of is whether TPS allows members to convert lump sum to annual pension?  I know my scheme does, but can't see anything on the TPS site to suggest it is possible. Anyone know?  

That’s called Inverse Commutation (sounds like something on the Maths Syllabus). Section 2.6 describes scenarios when it’s available.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/lump-sum-conversion-guidance-july-2019.ashx?rev=44b62116e15d4d62b0bc46c82a8e6868&hash=C40228DEB6A532AC1B81D589F8D8D61F

Morgan-Green

Sarahspangles said:

Morgan-Green said:

Another question I have thought of is whether TPS allows members to convert lump sum to annual pension?  I know my scheme does, but can't see anything on the TPS site to suggest it is possible. Anyone know?  

That’s called Inverse Commutation (sounds like something on the Maths Syllabus). Section 2.6 describes scenarios when it’s available.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/lump-sum-conversion-guidance-july-2019.ashx?rev=44b62116e15d4d62b0bc46c82a8e6868&hash=C40228DEB6A532AC1B81D589F8D8D61F

Thank you for this.  So it's clearly not applicable.

Sarahspangles

Morgan-Green said:

Sarahspangles said:

Morgan-Green said:

Another question I have thought of is whether TPS allows members to convert lump sum to annual pension?  I know my scheme does, but can't see anything on the TPS site to suggest it is possible. Anyone know?  

That’s called Inverse Commutation (sounds like something on the Maths Syllabus). Section 2.6 describes scenarios when it’s available.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/lump-sum-conversion-guidance-july-2019.ashx?rev=44b62116e15d4d62b0bc46c82a8e6868&hash=C40228DEB6A532AC1B81D589F8D8D61F

Thank you for this.  So it's clearly not applicable.

I think you should check on the David Fountain Facebook site. This is where someone with specific detailed knowledge of that scheme is useful.

Most of my DB pension is LGPS, I have retired pre-60, and will wait until the NRA to commence the pensions - but Hugheskevi’s comment about retiring from active service demonstrates that in the TPS there are different considerations even from ‘adjacent’ public sector schemes.

I am making use of my personal allowance (income tax) by drawing down from my SIPP until my DBs start. Most of my SIPP was funded in my last two working years in the NHS. This is quite tax efficient as I was a higher rate tax payer so I received 40% relief on some of this and will pay at most 15% on withdrawal (20% tax payer but 25% is tax free).

Also, it’s a bit niche but we’ve rejigged savings so that some of OH’s are now in joint accounts. I should get the starter savings tax rate for a couple of tax years meaning an additional £5k interest is taxed at 0%

Morgan-Green

Sarahspangles said:

Morgan-Green said:

Sarahspangles said:

Morgan-Green said:

Another question I have thought of is whether TPS allows members to convert lump sum to annual pension?  I know my scheme does, but can't see anything on the TPS site to suggest it is possible. Anyone know?  

That’s called Inverse Commutation (sounds like something on the Maths Syllabus). Section 2.6 describes scenarios when it’s available.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/lump-sum-conversion-guidance-july-2019.ashx?rev=44b62116e15d4d62b0bc46c82a8e6868&hash=C40228DEB6A532AC1B81D589F8D8D61F

Thank you for this.  So it's clearly not applicable.

I think you should check on the David Fountain Facebook site. This is where someone with specific detailed knowledge of that scheme is useful.

Most of my DB pension is LGPS, I have retired pre-60, and will wait until the NRA to commence the pensions - but Hugheskevi’s comment about retiring from active service demonstrates that in the TPS there are different considerations even from ‘adjacent’ public sector schemes.

I am making use of my personal allowance (income tax) by drawing down from my SIPP until my DBs start. Most of my SIPP was funded in my last two working years in the NHS. This is quite tax efficient as I was a higher rate tax payer so I received 40% relief on some of this and will pay at most 15% on withdrawal (20% tax payer but 25% is tax free).

Also, it’s a bit niche but we’ve rejigged savings so that some of OH’s are now in joint accounts. I should get the starter savings tax rate for a couple of tax years meaning an additional £5k interest is taxed at 0%

Yes, that site is an absolute treasure trove of information!

Sounds like you have everything in good order and a timeline mapped out.  That's great

Morgan-Green

Who do I contact to correct my employment record from 10 years ago?  I’m missing a whole year even though I was employed and contributing at the time.

The school say they don’t know who to speak to, although they have confirmed the need to correct my record, and county personnel tell me to speak to county pensions, whereas county pensions tell me to speak to county personnel!

Do TPS consider the specific school or county as my employer in this instance, and how does the correct employer contact TPS?

I’m so fed up with this all right now 😞 

katejo

Sarahspangles said:

Morgan-Green said:

Another question I have thought of is whether TPS allows members to convert lump sum to annual pension?  I know my scheme does, but can't see anything on the TPS site to suggest it is possible. Anyone know?  

That’s called Inverse Commutation (sounds like something on the Maths Syllabus). Section 2.6 describes scenarios when it’s available.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/lump-sum-conversion-guidance-july-2019.ashx?rev=44b62116e15d4d62b0bc46c82a8e6868&hash=C40228DEB6A532AC1B81D589F8D8D61F

My SAUL pension scheme allows me to reduce the lump sum and increase annual pension but their technician seemed unfamiliar with the term inverse (or reverse?)  commutation. That surprised me. I am still thinking about the pros and cons of doing this. I don't need a larger lump sum but might reduce it. 

Cobbler_tone

I recently attended a seminar hosted by our DB provider and asked this exact question, with our NRA at 60 and 65 (split). i.e. do the reduction factors penalise you?
His exact response from the transcript "they are not supposed to be but usually are"
I just immediately thought...not really if you get hit by a bus in 3 years time.
It is something you can easily model, without knowing the exact nature of RPI/CPI but many schemes are capped in that regard, so I go down the middle.

It may well impact any spousal element (I've learnt not to say 'always') and at some point in the future you will probably be worse off but you might not know or care when you get to that point.
I won't have a choice (well I have but will choose to take early) as it is a key part of my retirement strategy. It isn't just about the £'s for me.
In the same way as I could be drawing it now but would make no sense....unless I'm getting hit by a bus tomorrow.