Teachers pension

[Pensionquery]

Hi
my DH was a university lecturer many years ago, when pension was worked out on best three of last ten years salary. Since it was London I think this worked out at about 55k salary He looked at his forecast recently and pension payout would be about 14k pa.

we then moved away and he got a totally unrelated job. He’s now been offered a 0.5 lecturing position on a much lower salary (£46k full time).

i think the teachers scheme has now changed so it’s career average. But I am worried that if he now goes into the scheme that the best 3 of last 10 years will be based on his £23k Salary and actually his pension payout will fall.

I can’t get my head round the website and he said HR were reluctant to give advice so I don’t know what we should do. It seems nuts not to pay in but equally it seems stupid to pay in money if it ends up being a lower pension when he retires. He is currently 52

thanks in advance for any replies. I do appreciate its a rather boring niche question!

You mention two bursts of university lecturing, but then a teacher’s pension?
Are they both USS or both TPS?

Generally when a scheme changes the rules, the benefits accrued previously are “locked”. So even without leaving and rejoining the old benefits wouldn’t change.

Obviously you need to be certain on this.
HR are the wrong people to ask - they’re not pension scheme advisers. You need the pension administrator for the scheme.

MSE forum pensions board is a useful place to ask too.

How long did he pay in for? 14k PA seems like a lot if he wasn't actively paying in for very long?

If he left the final salary scheme years ago and had his pension worked out, he'll be a deferred member with a preserved benefit. That won't be affected by rejoining now at a different salary. He'll just have 2 periods of service in the scheme -one in the final salary scheme based on £55k pensionable salary and now a new one in the career average scheme based on whatever he's earning each year.

I have a family member that was in a very similar situation but with local authority jobs (both the same LA).

They had the pension for the second job set up as a completely separate pension plan/pot, so that it didn't affect the original pension. Could this be an option for your DH?

Testina is right - you need to speak with the administrators of the pension scheme in question and get a response in writing. (I have worked alongside pension administrators for 20 years. They can be slow to respond!)

Wow thanks for all the replies. He did I think about 20 years in uni which worked out at the 14k pension. It was an old poly as is his new role and they are both the TPS. I will encourage him to speak to someone at TPS then?

I think TPS changed to the new system in 2015 iirc. I have been in the scheme since 2007 and I gather you do get part of your pension on the old system and part on the new system, but I am not too clear how they work it out. And obviously it makes a difference how long you were in the scheme before the 2015 changes (to career average as you say).

Hi when I retired from teaching earlier this year I rang TPA and they were very helpful.

Alas i don’t know the details of teachers pensions.

But what you flag is a real risk that some pension schemes have done and people need to be wary of.

For instance i know that in the police, their move to a CARE scheme linked their old and new schemes and thus if someone went part time in their last three years, it would reduce what they would receive from supposedly protected accrued pension. Mad, not permitted to happen to non public schemes, but the government can do what it wants.

You need to get a written response or advice or get to grips yourselves with the scheme(s) details.

On a side note, if this is the result, don’t forget you can always set up a SIPP on the side, and invest outside of the teachers pension and you will get the tax relief on that immediately. Not really a silver lining, but it is something. And of course, available from 55 (or whatever the min retirement age is for partner) without any reduction for early retirement.

When calculating the final salary element of public sector pensions it’s the full time equivalent pay that is used, so going part time doesn’t reduce the pay used in the calculation.

What does happen is that from the point you go part time, if you’re still in a final salary scheme then the service accrued at a slower rate (but only from the point you go part time - it won’t affect full time service already accrued). For example if you spend 5 years working at half time, you accrue 2.5 years service which is then calculated for pension using full time equivalent pay. If you’re in a CARE scheme, from the point you go part time you will be accruing benefits on the part time salary but that doesn’t affect anything you’ve already built up on a full time salary and it won’t change the full time salary that would be used to calculate final salary benefits.

Where you do need to be careful is whether going part time also means that you lose any additional allowances that you received as a full timer, as that can affect your full time equivalent pay. For example, if a full time teacher gets an additional allowance for being head of year or something, but that role can’t be done by a part timer so the head of year allowance is lost when going part time - the full time equivalent pay would be lower and that will affect final salary benefits )although there are some protections where an earlier year’s pay can be used if the drop happens close to retirement).