Pension, Final Salary - My Brain Hurts!

Vitor

 - Thank you sir, you are a prince amongst men - 

  Just happen to have retired from the Civil Service a few years back after joining later in my career and being put onto a CARE pension (Alpha), then offered the McLeod Remedy for pensionable service up to 2022 (which I took!).  

One other thing to consider, if you weren't paying full National Insurance before starting work as teacher then you will miss getting a full State Pension at age 67. You should jump onto the Govt. pension checker web site and see what the projected STate Pension is at age 67. If you are 'short' on qualifying years even by working to 67 then a good use of spare money now is to make additional NI contributions to 'buy' the missing contribution years. For people in good health that's usually a very good retun by ensuring higher, index linked State Pension from age 67.

Marcon

peejaydj said:

Jut found this thread... I`m obvs not the only one   https://forums.moneysavingexpert.com/discussion/6568035/nhs-1995-pension-doesnt-grow-after-60

As I've already said, you aren't alone - and as that thread (which is about a completely different pension scheme with different rules) demonstrates, simply being part of a club populated by a lot of others who are equally bemused isn't going to help you.

Try https://www.facebook.com/groups/teachertoteacher.tps/?locale=en_GB - with 41K+ members, it's likely to be a better club to be in...

xylophone

Have you read

https://www.teacherspensions.co.uk/-/media/documents/member/guides/working-life/active-member-guide.ashx?rev=9a74a5cc9de741c7ad725f037ddf94ff&hash=5544D86B4C222A73E57AE5573BDF16F2

https://www.wesleyan.co.uk/pensions-and-retirement/teachers-pension/abatement

DRS1

QrizB said:

I'm definitely not an expert but this pdf shows there are late retirement factors for the NPA60 final salary pension.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/late-retirement-factors-july-2019.ashx?rev=021df1760dd94dfc8fb9440b714054eb&hash=56B2D04C51CE1348216E44182C479153

If I read this correctly there is no late retirement factor for the NPA60 benefits.  There is something for something called the Annual Allowance debit but hopefully that is not relevant.

DRS1

xylophone said:

Have you read

https://www.teacherspensions.co.uk/-/media/documents/member/guides/working-life/active-member-guide.ashx?rev=9a74a5cc9de741c7ad725f037ddf94ff&hash=5544D86B4C222A73E57AE5573BDF16F2

https://www.wesleyan.co.uk/pensions-and-retirement/teachers-pension/abatement

Some interesting bits there.  From Doc 1

" Once you reach your Normal Pension Age 

(NPA) and providing you’re out of pensionable 

service, you can apply for your benefits. If 

you continue in pensionable service after you 

reach your NPA your benefits will be paid from 

the last day of pensionable service. If you 

delay making your claim then your benefits 

will be backdated to your last day of service 

or when you reached your Normal Pension 

Age, whichever is the later. Any backdated 

payments will be paid as a lump sum and will 

be subject to tax"

That suggests you didn't miss anything obvious.  There may be ways and means of getting your NPA60 benefits from 60 but it probably involves a bit of paper shuffling and leaving employment perhaps?

This bit also seems to be at odds with the process mentioned in the abatement paper (reducing hours).  But maybe abatement is another reason you may not want to take your NPA60 benefits just yet if you now have a good work/life balance.  I am not sure how the abatement sums would tie in with you having already gone down to 75% working  Do you have to abate from the 75% or do you still have a reference salary based on 100% working?

I don't think you should be ashamed of not understanding it all.  The TPS gives people a lot of flexibility and that makes it more complicated than something which just says you only get your pension at 67.

hugheskevi

It might be worth recapping the key facts that have been documented throughout the thread:

• Joined Teachers Pension Scheme at age 42, participating in the 1/80ths with 3*lump sum scheme with Normal Pension age (NPA) of 60
• Moved to work 3 days per week at age 60, did not commence pension
• Currently aged 63
• Planning to retire at age 67

Hence this means:

• The OP is an active member of both the 1/80ths final salary scheme and also the post 2022 career average scheme.
• The OP is not accruing any further service in the final salary scheme, but the final salary pension retains a final salary link (ie pension benefits will be calculated on final pensionable earnings when the OP leaves the scheme). Most importantly, the OP is not a deferred member of the final salary scheme, and it is not increasing each year in line with inflation as a deferred pension would.

It is worth remembering that the general principle for the old final salary pension schemes was that an individual cannot receive more from their pension and salary than their full time salary - that is the basis of the abatement policy. Hence if you continue in work past normal pension age you either don't receive the pension, or you must reduce salary to be able to be paid the pension.

I am not an expert in Teachers pension, but I would expect:

• There will be no arrears paid when the OP claims their final salary pension.
• There will be no late retirement factor applied.
• The OP could have chosen to receive the £9K p/a when they went part-time at age 60. Subject to abatement, the pension would have been put into payment alongside their part-time salary. 
• As the OP did not commence their pension, they remained an active member of the final salary scheme with a final salary link. Although they could have claimed the £9,000 p/a at age 60, they did not, and as no arrears nor late retirement factor applies, the money for the past years from age 60 will not be available as arrears or a higher pension when they claim their pension (a case of 'take it or lose it'). The lump sum wil still be there, based on the pension that is put into payment.
• To access the pension now, the OP may have to partially (or fully) retire, which will mean reducing salary, probably by further reducing hours.

But all of the above bullets should be clarified with the scheme administrator, as there may be nuances in the Teachers scheme that are dealt with differently in other public service pension schemes.

peejaydj

I know I keep saying, but i am so appreciative of the time you lovely people are taking to help. It is  so kind and a tonic in a time of so little empathy. However I am still very confused . there are so many variant options. I will peruse tomorrow and hope fto gain some clarity.   mean while this popped up concerning (a slightly different) TP confusion issue   FYI...  https://www.theguardian.com/money/2025/sep/19/newly-retired-uk-teachers-delays-teachers-pension

peejaydj

xylophone said:

Have you read

https://www.teacherspensions.co.uk/-/media/documents/member/guides/working-life/active-member-guide.ashx?rev=9a74a5cc9de741c7ad725f037ddf94ff&hash=5544D86B4C222A73E57AE5573BDF16F2

https://www.wesleyan.co.uk/pensions-and-retirement/teachers-pension/abatement

Thankyou xylophone. I read the TP active member doc and am still none the wiser about that I should have applied for annual lump sum at 60. I read the Wesleyan doc and think that I wont reach level where abatement  costs kick in (but will check!) 

peejaydj

hugheskevi said:

It might be worth recapping the key facts that have been documented throughout the thread:

• Joined Teachers Pension Scheme at age 42, participating in the 1/80ths with 3*lump sum scheme with Normal Pension age (NPA) of 60
• Moved to work 3 days per week at age 60, did not commence pension
• Currently aged 63
• Planning to retire at age 67

Hence this means:

• The OP is an active member of both the 1/80ths final salary scheme and also the post 2022 career average scheme.
• The OP is not accruing any further service in the final salary scheme, but the final salary pension retains a final salary link (ie pension benefits will be calculated on final pensionable earnings when the OP leaves the scheme). Most importantly, the OP is not a deferred member of the final salary scheme, and it is not increasing each year in line with inflation as a deferred pension would.

It is worth remembering that the general principle for the old final salary pension schemes was that an individual cannot receive more from their pension and salary than their full time salary - that is the basis of the abatement policy. Hence if you continue in work past normal pension age you either don't receive the pension, or you must reduce salary to be able to be paid the pension.

I am not an expert in Teachers pension, but I would expect:

• There will be no arrears paid when the OP claims their final salary pension.
• There will be no late retirement factor applied.
• The OP could have chosen to receive the £9K p/a when they went part-time at age 60. Subject to abatement, the pension would have been put into payment alongside their part-time salary. 
• As the OP did not commence their pension, they remained an active member of the final salary scheme with a final salary link. Although they could have claimed the £9,000 p/a at age 60, they did not, and as no arrears nor late retirement factor applies, the money for the past years from age 60 will not be available as arrears or a higher pension when they claim their pension (a case of 'take it or lose it'). The lump sum wil still be there, based on the pension that is put into payment.
• To access the pension now, the OP may have to partially (or fully) retire, which will mean reducing salary, probably by further reducing hours.

But all of the above bullets should be clarified with the scheme administrator, as there may be nuances in the Teachers scheme that are dealt with differently in other public service pension schemes.

Yeh thanks hugheskevi.... 'take it or lose it' ... how should I have found that out that it existed?... I still cannot see it mentioned anywhere and have been reading stuff for 2 days. what am I missing?? I feel really stupid whu was this not made clearer... I`m reasonably intelligent a heads up would have been useful.
As you say:

• As the OP did not commence their pension, they remained an active member of the final salary scheme with a final salary link. Although they could have claimed the £9,000 p/a at age 60, they did not, and as no arrears nor late retirement factor applies, the money for the past years from age 60 will not be available as arrears or a higher pension when they claim their pension (a case of 'take it or lose it'). The lump sum wil still be there, based on the pension that is put into payment.
• To access the pension now, the OP may have to partially (or fully) retire, which will mean reducing salary, probably by further reducing hours.

LHW99

The OP is an active member of both the 1/80ths final salary scheme and also the post 2022 career average scheme.

Also

Since April 2022, all teachers have been in the career average scheme (CARE). The benefits from that are:

Accrued more slowly (1/57th per year)

My understanding is that 1/80 per year is a smaller fraction than 1/57 per year, so CARE would actually accrue more quickly.

I think it was how the unions were persuaded not to fight the change.