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    • Happymonday
    • By Happymonday 18th Sep 19, 7:21 PM
    • 9Posts
    • 8Thanks
    Happymonday
    Worth doing?
    • #1
    • 18th Sep 19, 7:21 PM
    Worth doing? 18th Sep 19 at 7:21 PM
    My wife is a part-time teacher and opted out of her DB scheme last November because she plans to retire in the next 12-24 months and the teachers scheme DB's are based on the last 10 years of contributions. Continuing in a part time capacity would have eroded her DB's. She is only working 3 days a week and her salary is 24k. I have suggested to her that by putting 5% away in a separate scheme would still be worthwhile as it would still help to reduce her tax. However, if she is just working for the next 12-24 months is this really worthwhile due to any charges associated with setting up a new scheme? Advice appreciated.
Page 2
    • Happymonday
    • By Happymonday 20th Sep 19, 3:41 PM
    • 9 Posts
    • 8 Thanks
    Happymonday
    Thanks everyone and she is going to ask for a written response. She actually held a promoted / higher paid role 10 years ago but then then took a lower grade purely teaching role. This was the main reason for opting out. However, she is planning to speak directly with them on Monday.
    • Bravepants
    • By Bravepants 20th Sep 19, 3:43 PM
    • 646 Posts
    • 877 Thanks
    Bravepants
    The Teachers' Pension glossary says:
    So the part-time status appears to be irrelevant.

    As long as the best 3 years' salary over the previous 10 years aren't about to drop out of the calculation (ie they were something like 2008, 2009 and 2010) then it would seem she could be in the scheme without affecting the final pay figure used to calculate the pension.
    Originally posted by hugheskevi

    This is similar to the way the Civil Service pension works.
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
    • xylophone
    • By xylophone 20th Sep 19, 5:23 PM
    • 31,380 Posts
    • 19,455 Thanks
    xylophone
    However, she is planning to speak directly with them on Monday.
    Do come back and tell us how it pans out - it could be helpful to other posters.
    • jem16
    • By jem16 20th Sep 19, 6:08 PM
    • 18,718 Posts
    • 11,560 Thanks
    jem16
    Please be very careful before opting back in. My sister has left the TPS because if she'd remained she'd have lost 2008 from her "best in 3" calculation. Due to high inflation/RPI/CPI increases that was one of her best years. She would have paid into the pension scheme all year and ended up having paid a full year's contributions to get her a lower pension!
    Originally posted by Sue S
    Yes 2008 will have fallen off as of March 2019. However the difference between that and the 2009/10/11 calculation with up to a year's extra service would have to be taken into account too.

    For example;

    2008/09/10 recalculated figure is 38077. 38 years service gives a pension of 38/80ths so 18086 pension and 54258 lump sum.

    2009/10/11 recalculated figure is 37673. 39 years service gives 39/80ths so 18,365 pension and 55096 lump sum.

    Did your sister get calculations for both or not?

    The there was also the death-in-service benefits of 3 times annual salary to consider.

    Speak to the TPS before making any decision and don't blindly opt back in as some posters have advised.
    Absolutely but if experience is anything to go by they will not be able to give you these calculations.

    What is needed is the actual spreadsheets which I had up to date till at least 2016. As I retired I didn't keep them up to date after that.
    Last edited by jem16; 20-09-2019 at 6:36 PM.
    • jem16
    • By jem16 20th Sep 19, 6:11 PM
    • 18,718 Posts
    • 11,560 Thanks
    jem16
    Thanks everyone and she is going to ask for a written response. She actually held a promoted / higher paid role 10 years ago but then then took a lower grade purely teaching role. This was the main reason for opting out. However, she is planning to speak directly with them on Monday.
    Originally posted by Happymonday
    It would have been helpful to have given that information in your post in the first place.

    if she's in a Union, she may be better contacting them as in my experience the TPS will not so specific calculations until your inform them of your wish to retire. I got a spreadsheet from the Union that allowed me to model exactly which 3 years would be used. They were spot on and a few people have used that spreadsheet on here.
    • zagubov
    • By zagubov 20th Sep 19, 10:33 PM
    • 16,498 Posts
    • 134,314 Thanks
    zagubov
    If you visit the TP website, emails don't get speedy replies, and the website is a bit of a maze. When exploring it, take lots of screenshots to print out later.

    Phoning's usually better and faster, but be aware they can's suggest plans of action (as that would be advice) but they can talk about their consequences, so line up questions like if I do this will I then be allowed to do that?

    They are very helpful but they're not supposed to be proactive and push ideas on you.

    Don't expect them to be able to quote precise figures about your individual pension over the phone either- they take ages for them to work out.

    You may want to ask them whether unclaimed pension after your Normal Pension Age of 60 is lost or is eventually returned to you via actuarial enhancement or as arrears.

    Is it the case that you are still accumulating future benefits the longer you work past this age, and the index-linking is increasing these future benefits.

    Ask how can you check if you best salary years will fall off the end if you delay retirement too long.

    You may want to think about how this reduces your death in service benefits if you're using the pension for life insurance purposes to protect mortgage/family.

    You may be automatically offered a lump sum, plus the chance to sacrifice future pension income to enhance it. Once you decide on this, it is irreversible and can't be changed. The conversion rate isn't generous -each 1 you lose from your pension gives you 12 lump sum, but you're likely to live for up to 30 years after pension age, instead of just 12.

    If you're in England like me, you may find this page useful;
    https://www.teacherspensions.co.uk/members/resources/factors.aspx
    apologies if you're already familiar with this.

    Good luck. I'm partly retired and taking a long time to phase out my work, while collecting my (almost) full pension.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • Happymonday
    • By Happymonday 23rd Sep 19, 10:49 AM
    • 9 Posts
    • 8 Thanks
    Happymonday
    My wife spoke to TP today and they advised that she should opt in again.

    She opted out in November as her 'best three years' were 2008-2010 when she was in a more senior role. If she had stayed in one of these years would have fallen out of this period and her average would have dropped.

    However, news to me was that she has been advised to join again because at the point of opting out that is seen as the end of a specific period of taking pension and she is now seen as being in a 'pension break' period. If she opts in again her original 'best three years' are safeguarded and when she does retire the best three years of the second period are considered against this first period and the higher of the two will be the basis of her pension.

    Now getting in writing!
    • Sue S
    • By Sue S 23rd Sep 19, 1:48 PM
    • 268 Posts
    • 190 Thanks
    Sue S
    My wife spoke to TP today and they advised that she should opt in again.

    She opted out in November as her 'best three years' were 2008-2010 when she was in a more senior role. If she had stayed in one of these years would have fallen out of this period and her average would have dropped.

    However, news to me was that she has been advised to join again because at the point of opting out that is seen as the end of a specific period of taking pension and she is now seen as being in a 'pension break' period. If she opts in again her original 'best three years' are safeguarded and when she does retire the best three years of the second period are considered against this first period and the higher of the two will be the basis of her pension.

    Now getting in writing!
    Originally posted by Happymonday
    Thanks for this, I've just sent the info to my sister suggesting she contact the TPS - so perhaps she'll opt in again too...
    • jem16
    • By jem16 23rd Sep 19, 5:44 PM
    • 18,718 Posts
    • 11,560 Thanks
    jem16
    However, news to me was that she has been advised to join again because at the point of opting out that is seen as the end of a specific period of taking pension and she is now seen as being in a 'pension break' period. If she opts in again her original 'best three years' are safeguarded and when she does retire the best three years of the second period are considered against this first period and the higher of the two will be the basis of her pension.

    Now getting in writing!
    Originally posted by Happymonday
    Has she approached her Union yet? Not necessarily the local rep but someone from Union HQ should be able to help too.
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