Pension, Final Salary - My Brain Hurts!

peejaydj

Isthisforreal99 said:

As to how OP should have known, were they not getting annual statements showing what was payable at 60.

If it's any consolation there is a similar lack of knowledge in the Civil Service where people work full time beyond 60 where they could have taken partial retirement at 60, worked 3 days a week fotlr the same take home income (pay and pension). 

I have now been on the Facebook Teachers pensions page (thankyou for the recommendation  ..above)  and discover that MANY MANY of us  teachers ARE SAYING EXACTLY THE SAME thing and have somehow have missed this and have lost TENS OF THOUSANDS of pounds.. (SOME HAVE LOST 9 YEARS OF THIS CASH!!!). not just me.. This reeks of negligence by TP to ensure that we  understood and were clear about the ramifications what we had to do.. (the TP pensions site is to me impenetrable. I dont understand any of the jargon.. it is like a new language!!)
.. This shouts  `Class Action Lawsuit` to me I think most people may have been too embarrassed by their own `perceived` negligence to understand this and then to have the confidence to question  this patent case of unfairness and have just accepted 

peejaydj

Isthisforreal99 said:

LHW99 said:

Isthisforreal99 said:

As to how OP should have known, were they not getting annual statements showing what was payable at 60.

If it's any consolation there is a similar lack of knowledge in the Civil Service where people work full time beyond 60 where they could have taken partial retirement at 60, worked 3 days a week fotlr the same take home income (pay and pension). 

On the whole (historically at least) the TPS have never sent annual statements for the DB scheme. The initial booklet let you know the accrual rate of 1/80, and apart from a statement of benefits if deferred (and at that time-point), you couldn't learn any more until just before claiming the pension.

It is really only relatively recently that any sort of calculators have been available.

My understanding is that it is a requirement. Could be wrong but MyCSP (who run Civil Service pensions) have reported themselves to Pensions Ombudsman as, for a small % of members, they will not be able to issue a statement.

Hell Yeh!  thankyou..... this lack of clear guidance in understandable form for non experts is IMO negligence I am an expert teacher not an expert legal a pensions accountant! TP should do the same and report themselves before I do 

peejaydj

Essentially this is about the use of Plain English as in Legal matters. This is becoming embedded in Law. This is why I titled this thread " My brain hurts"  I am not stupid but am utterly utterly confused by all of this (in spite of the incredible expertise contributors are sharing.. Thank you Thank you! )    I am a creative, I play Jazz music (well) and maybe a bit autistic  Anyhoo,  my brain  simply doesn`t  work this way! I  am not thick but I dont understand any of this....no matter how hard I try.. I am still so confused by all this jargon, jargon jargon.  TP surely should have a duty of care for their clients?     (oh it has been outsourced  to some mega-company.. is it Capita??  Heaven knows)

peejaydj

Isthisforreal99 said:

As to how OP should have known, were they not getting annual statements showing what was payable at 60.

If it's any consolation there is a similar lack of knowledge in the Civil Service where people work full time beyond 60 where they could have taken partial retirement at 60, worked 3 days a week fotlr the same take home income (pay and pension). 

Thank you... " similar lack of knowledge"     ..... whhat can we do?

peejaydj

LHW99 said:

Isthisforreal99 said:

As to how OP should have known, were they not getting annual statements showing what was payable at 60.

If it's any consolation there is a similar lack of knowledge in the Civil Service where people work full time beyond 60 where they could have taken partial retirement at 60, worked 3 days a week fotlr the same take home income (pay and pension). 

On the whole (historically at least) the TPS have never sent annual statements for the DB scheme. The initial booklet let you know the accrual rate of 1/80, and apart from a statement of benefits if deferred (and at that time-point), you couldn't learn any more until just before claiming the pension.

It is really only relatively recently that any sort of calculators have been available.

Thankyou LHW99   so therefore ... If I didnt claim, I wouldn`t know"  ??  pure catch 22!

LHW99

peejaydj said:

LHW99 said:

Isthisforreal99 said:

As to how OP should have known, were they not getting annual statements showing what was payable at 60.

If it's any consolation there is a similar lack of knowledge in the Civil Service where people work full time beyond 60 where they could have taken partial retirement at 60, worked 3 days a week fotlr the same take home income (pay and pension). 

On the whole (historically at least) the TPS have never sent annual statements for the DB scheme. The initial booklet let you know the accrual rate of 1/80, and apart from a statement of benefits if deferred (and at that time-point), you couldn't learn any more until just before claiming the pension.

It is really only relatively recently that any sort of calculators have been available.

Thankyou LHW99   so therefore ... If I didnt claim, I wouldn`t know"  ??  pure catch 22!

Quite possibly, if you didn't understand the booklet, as is very likely as it used to be written at least.

OH & I had a couple of paid for meetings with an IFA as we were approaching 60, and this was something (usefully) he mentioned in passing. As I had left the service by then though, I couldn't pass that on to any work colleagues.

d6fs1l

I remember reading one of Paul Johnson's columns in the Times earlier this year where he mentioned this issue. The text is reproduced on the IFS site: https://ifs.org.uk/articles/heres-pension-tweak-nudging-civil-servants-work-past-60

Interestingly, he says that while there is no actuarial enhancement of the NPA60 benefits for late retirement in the TPS (which I am sure is correct), you do get them paid as arrears when you start drawing your benefits. 

The TPS's own material suggests (p. 14) that this is correct if you are not in pensionable employment when you reach the NPA:

https://www.teacherspensions.co.uk/-/media/documents/member/guides/planning-retirement/retirement-planning-guide.ashx?rev=8501f05bb3a541b597d63489fd998840&hash=AD4F6B7E02C62976E794F2D10CB70E1E#:~:text=Types of retirement If you're not in,benefits are payable from your 75th birthday.

This leaves the question of whether you receive arrears if you are in pensionable employment when you reach the NPA. The detailed example in 

https://www.teacherspensions.co.uk/members/search/-/media/463f33f11072444a90a11d5bad550bb7.ashx

(example A, page 7) does not mention it.

Isthisforreal99

peejaydj said:

Isthisforreal99 said:

As to how OP should have known, were they not getting annual statements showing what was payable at 60.

If it's any consolation there is a similar lack of knowledge in the Civil Service where people work full time beyond 60 where they could have taken partial retirement at 60, worked 3 days a week fotlr the same take home income (pay and pension). 

Thank you... " similar lack of knowledge"     ..... whhat can we do?

Educate yourself. I'm 53 but know exactly how much I'll be entitled to and when. Blaming others won't help. 

Too many people take no interest in their pension. The information is out there.

hugheskevi

There are several common 'passive' errors made with public service pension schemes by members:

1. Not transferring past pension on joining - a decade ago the transfer terms were quite generous and individuals could get a huge increase by transferring in a past private sector DB pension. Much less attractive now, but still a serious consideration that is often overlooked.
2. Failing to engage with pensions when becoming a higher rate taxpayer - with higher rate income tax and then Child Benefit taper soon after, this is a key time to consider pensions even if they have previously been overlooked.
3. Ignoring Annual Allowance communications and simply assuming it wasn't something they need to engage with actively.
4. Ignoring personal/DC pensions - particularly after pension flexibilities, DC pensions are often a perfect complement to DB pensions. Especially once members reach age 55 and can take the pensions immediately, DC pensions can be extremely attractive in a range of scenarios, eg redundancy, early retirement, and so on. 
5. Not opting out of scheme to lock in a higher final salary - this is when a scheme uses inflation adjusted past salary to calculate final pensionable earnings. It can be optimal to opt-out just before a higher past value drops out of a look back period (eg if values over the last 5 years are used). This is less of an issue now though due to the career average schemes being introduced. 
6. Not claiming pension at Normal Pension age and continuing to work

The other big error is assuming pension commencement lump sum is a good thing to take and taking the maximum with no further consideration, despite the 12:1 commutation rate.

Most members never realise what they have overlooked, and many of the above have been improved or removed as an issue by the introduction of the 2015 career average schemes, but the issues take a long time to work their way out of the system as members who joined before 2015, and particularly before 2012, will be around for a long time.

peejaydj

Vitor said:

- Yeh thanks hugheskevi.... 'take it or lose it' ... how should I have found that out that it existed? -

In the Teachers’ Pension Scheme it’s worth being clear on two points:

• If you don’t draw your final salary pension at age 60, you don’t get arrears later. But the pension isn’t “lost” either, it’s still linked to your eventual pensionable salary and, if taken after NPA, normally attracts a late-retirement uplift.

Hi Vitor,  so you are saying?     1.  Overall I dont lose any money  at all in the long run? ie.  in spite of the £9k p/a not drawn?  and   2.  it is simply added on at the point when I do take my final pension which will be higher as a result ?   and 3. then on top of that I get the late-retirement uplift for working those extra few years past 60?