Can I withdraw my TPS pension as an active USS member

TPSdUSSa

I am 57 and currently an active USS member. I had been with TPS for nearly 20 years before I moved to my current employer and joined USS, becoming a deferred member of TPS. In my TPS statement, there are two options: one is the final salary scheme NPA (60), the other is a hybrid scheme of partially NPA(60) and partially NPA(67).

My questions are:

(1) Can I withdraw my TPS pension when I reach 60, while still working full-time and contribute to USS? I like NPA(60) because it is simpler.

(2) My USS IB pot is small currently. If the answer to (1) is yes, I can use salary sacrifice to boost IB without reducing the total take-home income. I still have a mortgage and children in Uni/School. Is it fine to do so?

I am new to the forum and will really appreciate your advice.

El_Torro

I'm not familiar with the specifics but as I understand it you can transfer from one to the other, however there is a time limit. You have to have joined the USS scheme in the last 12 months, any longer than that and I believe the opportunity is lost.

There are people on this forum who can give you a much more thorough answer than mine, just thought I'd mention the time limit as that is what usually catches people out.

ussdave

https://forums.moneysavingexpert.com/discussion/6657754/can-i-withdraw-my-tps-pension-as-an-active-uss-member

1. I'm not a TPS expert but I don't see why you wouldn't be able to commence your TPS pension at the NPA age of 60. I'm not sure if you can split out the two different portions - I'd guess you need to take them both together and the hybrid part would be reduced a little due to ERFs.
2. Assuming you can afford it then it make sense to max out the IB pot payments, especially via salary sacrifice.

If you search the forum for the USS general discussion thread (it's a long read) there's lots of useful info re the USS pension. One good benefit to be aware of is that the hybrid nature of the scheme means that you may be able to withdraw a large portion of your IB funds tax free (beyond the standard 25%).

edit: On re-reading, I think I misunderstood your statement regarding the TPS options. Probably you can ignore my point regarding ERFs.

Andy_L

1. You can start taking your pension (ie the annual payment & possible lump sum) you cannot withdraw it in the sense of withdrawing the full value of the pension in one go as it is a Defined Benefit pension, so there is no "pot" as such in your name. Doubly so as it is an unfunded public sector pension

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81907108#Comment_81907108

Transfers in to USS don't have to be made within 12 months of joining - something which is easy enough to check: https://www.uss.co.uk/for-members/your-pension-explained/transferring-in-to-uss.

Transferring from TPS to USS isn't an option, because USS transfers in are put into the IB section (a defined contribution arrangement). TPS doesn't allow transfers to a DC scheme.

TPSdUSSa

https://forums.moneysavingexpert.com/discussion/comment/81907108#Comment_81907108

Thank you very much for your reply. I have been with USS for some years now and because TPS is considered more generous than USS, I did not transfer when I changed my job.

TPSdUSSa

Thank you very much for your reply. Sorry I mean start taking my TPS pension from 60, effectively having a second income while still working and contributing to USS.

Marcon

Thank you very much for your reply. Sorry I mean start taking my TPS pension from 60, effectively having a second income while still working and contributing to USS.

Be aware that if you take a tax free lump from TPS and then substantially increase your contributions (which includes those made by salary sacrifice), you could fall foul of the pension recycling rules.

DRS1

In other threads on the TPS there have been mentions of a facebook group on Teachers Pensions which people seem to rate.

I think the suggestion on here is that you should take the NPA 60 benefits at 60 at the latest because you get no late retirement uplift. I think the suggestion is that you can take the final salary NPA60 portion without taking the NPA67 portion but maybe that is for active members? And maybe you want to take it all in one go. If so then expect the NPA67 bit to be reduced for early payment if you take it at 60.

This note about the recycling rules has a neat flow chart which may help you decide if those rules could apply to you.

Recycling of tax-free cash & pension recycling rules - Royal London for advisers

DRS1

It should be mentioned that probably quite a few people have done what you are contemplating - ie take pension A and use it to allow them to contribute more to pension B - and I don't think there have been reports on here of them being pounced on by HMRC for recycling but that is not to say it hasn't happened or won't happen in the future.

I think it is fair to say that putting a DB pension into payment on the NPA is not really what those rules were designed to cover.

TPSdUSSa

https://forums.moneysavingexpert.com/discussion/comment/81907352#Comment_81907352

I do not plan to put the lump sum from TPS into my USS pension. That will be used to pay off part of my mortgage. In ters of salary sacrifice, I have already been putting a fixed percentage of my salary towards IB in the past 3 or 4 years. Thanks for pointing me to pension recycling rules - I will check them out.