Teacher pension scheme options
Comments
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Ref the last post-
Yesterday we received a reply from the Department of Education (NI). The original letter we were sent seems to be valid after all.
My wife falls into the category of 'transition member' = within 13.5 years of NRA60 on 1 April 2012.
So - this means that if she takes the NRA60 scheme at age 60, that she is 'forced' to take the CARE scheme at the same time, but the CARE (NRA67) scheme will be actuarially reduced by 31% (= 7 years).
Interestingly, when I do a quick assessment (no indexing for increases/inflation etc) of what impact this has, it is not too bad in real terms. It takes 21+ years until the income totals break-even i.e. she needs to be aged 81-82 before the extra income from the CARE NRA67 scheme matches the income from drawing 7 years early. Even then, the numbers are quite small as there is not much in the CARE scheme.
Hope this is useful for all those considering what their options are.0 -
Unless there are restrictions specifically in place for NI then I wouldn't draw a line under this just yet.
The doc linked to below is from the TPS themselves. Its contents throws doubt on what the DoE are telling you:
https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/miscellaneous/understanding-scheme-changes/understanding-which-member-type-you-are-factsheet.ashx
Firstly, if you wife was within 13.5 years of her NRA at April 2012 (and more than 10 years) then she would be a Tapered member, not a Transition member. The latter are those who were more than 13.5 years from NRA.
Secondly, whichever type of member she is it clearly states that both types can choose whether they want to take their career average benefits early with actuarial reduction or defer them to the career average scheme's NRA.
It might be worthwhile for your wife to contact the TPS and her union for their views ?0 -
I was not too convinced either and was considering looking into it in more detail, including contacting the union.
However, when I did the break-even analysis and found that it took 21+ years until the benefits would be realised by 'deferring' the CARE portion until NRA67, then it seemed like taking it early, even with the actuarially reduced benefits, was perhaps the best option.
In fact, some of the analysis shows that if it is deferred until the couple of years before NRA67, then it is necessary to live until age 99, before the breakeven point is reached.
We don't need to make quick decisions, so can still review the options for a few years yet.
Thanks for your help.0 -
Ref the last post-
Yesterday we received a reply from the Department of Education (NI). The original letter we were sent seems to be valid after all.
My wife falls into the category of 'transition member' = within 13.5 years of NRA60 on 1 April 2012.
So - this means that if she takes the NRA60 scheme at age 60, that she is 'forced' to take the CARE scheme at the same time, but the CARE (NRA67) scheme will be actuarially reduced by 31% (= 7 years).
Interestingly, when I do a quick assessment (no indexing for increases/inflation etc) of what impact this has, it is not too bad in real terms. It takes 21+ years until the income totals break-even i.e. she needs to be aged 81-82 before the extra income from the CARE NRA67 scheme matches the income from drawing 7 years early. Even then, the numbers are quite small as there is not much in the CARE scheme.
Hope this is useful for all those considering what their options are.
Think that the fire fighters judgement will be applied to the teachers pensions as well. Don't think they have the remedy yet? There is another thread somewhere about the fire fighters judgement somewhere?Early retired in summer 2018 and loving it0 -
Think that the fire fighters judgement will be applied to the teachers pensions as well. Don't think they have the remedy yet? There is another thread somewhere about the fire fighters judgement somewhere?
Well, the Government and the parties are a little busy at the moment. I reckon it will take a year or two before they decided to come up with a remedy.0 -
We were not aware about the Firefighter ruling.
This could very well have a positive impact on our situation and remove this problem completely.
Thanks0 -
Hi cobson,
We have looked into what you have said and agree that the last letter received does indeed appear to be incorrect, when compared the the factsheets. My wife is a taper/partial protected member and not a transition member as stated by the Teachers Pension office.
Another email has been sent, third time lucky......??
I will post the reply.
Thanks
PS - the NI TPS factsheets do seem to disagree with the https://www.teacherpension website factsheet. I would be surprised if this is the case in reality. The Union will have to be queried/informed; maybe the rules are being interpreted or applied differently in different parts of the UK?0 -
Similar situation with my wife. She paid significant contributions into the Prudential AVC for many years, but the performance was very poor. She decided to transfer all of her AVCs across into a SIPP (with HL) and has been very pleased with the results. A couple of the Global and Asian Equity Income funds have really grown significantly. She actually drew her Teachers pension 6 years ago (at 60) but did some part-time teaching for a couple of years all the time paying into the SIPP. She is now fully retired (and has now reached SPA) but she hasn't yet moved her SIPP into Drawdown. Probably do this next Autumn.My wife went the AVC route with the TPS about 8 years ago, to be honest it's grown very, very little over the years, probably just kept pace with inflation, the choice of funds with Prudential is very limited.
The only gain she has made is the fact that she is a high rate tax payer so gains the 40% relief.0 -
Hi cobson,
We have looked into what you have said and agree that the last letter received does indeed appear to be incorrect, when compared the the factsheets. My wife is a taper/partial protected member and not a transition member as stated by the Teachers Pension office.
Another email has been sent, third time lucky......??
I will post the reply.
Thanks
PS - the NI TPS factsheets do seem to disagree with the https://www.teacherpension website factsheet. I would be surprised if this is the case in reality. The Union will have to be queried/informed; maybe the rules are being interpreted or applied differently in different parts of the UK?
My wife is also in the NITPS. Would have the email address you are using to contact them for questions.
She is a Transition member and I believe that at 60, she can take the old FS NRA 60 pension and is NOT forced to take the NRA 67 CARE pension at that stage. If she takes it before 60, she IS forced to take the CARE NRA 67 pension as well - both actuarially reduced.
Thats my understanding. She was at the UTU pension workshop on Thursday last week and has been offered a 1 hour one on one meeting to discuss her pension with a local (Belfast) IFA.0 -
Hi tigerspill
See Factsheet 4 -
https://www.education-ni.gov.uk/sites/default/files/publications/education/nitps-factsheet-4-retirement_0.pdf
See specifically this statement: -
"If you are a transition member and have service in the final salary and career average
arrangements, you will have to take all your benefits (final salary and career average) at
the same time and these will be actuarially reduced."
My Wife has been classed incorrectly as a 'Transition' member and they tell her that she can't take them separately as you suggest. Our original plan was to take the NRA 60 at age 60 and then the CARE at a later date (before 67 it would be actuarially reduced).
Contact email is: nitpsabsqueries@education-ni.gov.uk
A Taper member should be able to take them separately, but we have not yet received confirmation back yet.
If NITPS are correct (??), then it would appear that the NI scheme is different to the rest of the UK and Transition members don't have the same flexibility to take both schemes at different dates as per their UK colleagues.
Please check with the UTU; it could be that the NITPS have got it wrong.
Also, I suggest doing the breakeven maths for taking the CARE scheme early, we found that the breakeven point was surprising 'old' and are thus now likely to take it at least a few years before NRA67.0
This discussion has been closed.
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