Move to Independent school lose TPS?

[mostlyhalfbaked]

Hi, I've seen a great job in a really lovely independent school nearby. Salary is potentially 7K more than I currently earn, for a similar job. It would be a better work life balance, more convenient etc BUT it is going to stop the TPS and therefore long term I'm wondering if it is worth it?
I have 15 full time and 5 part time years in my TPS, so far.
Would you make the move?

Take advantage of the free meeting, organise one with the Wesleyan as well.

One other thing that I forgot to mention...if he does join the other scheme and leaves in 3-4 years time he may want to investigate doing some supply work directly with a school, or even a term or more, so that he can re-join the TPS and on doing that he can look to transfer the money from the private scheme INTO the TPS. David Fountain has a video on YouTube on the value you can get from doing this:

Just saw this and wanted to add that although teachers are now in a career-average scheme, the point is that the "final salary" used to calculate the final-salary part of pension is still worked out from consideration of all your salary up to normal pension age (NPA).

This is what I explained (poorly) in previous post. If you take a pay cut to stay in TPS, this could affect what you are paid as the final salary part of your pension - which is most of it. This may not be a problem as the "final salary" is the better of the actual final salary when you reach NPA, or the best three continuous years service in the last ten, adjusted for inflation. If you look at your benefits statement, you can see which method is currently used for you. If the last 12 months is used, that is the better option for you currently. If you take a pay cut to stay in TPS, your best 12 months will be reduced. The calculation might revert to the best three years, but the key thing is that reducing your final salary before you reach NPA is potentially very costly. (I think!)

e.g. current salary =50,000
you have 30 years in final salary scheme (with NPA=60)
final salary pension =30/80*50,000 = 18,750

you take a 10% pay cut to stay in TPS
final salary pension = 30/80*45,000 = 16,875 (10% reduction)

of course you get another year in the career average scheme which is an extra 1/57th of your salary (£877 - payable at state pension age).
The above is the worst case scenario as your "final salary" might swap to the best three years if this is better for you.

Note too that if your "real" salary was higher ten years ago due to inflation, you might see your best years "age out". If your benefits statement shows that is using Method B and the years it is using are ten years ago, you might be better to leave TPS before these years are lost.

ps "independent" financial advisors provided by schools are often not clear on TPS rules. They just want to sell you financial products in my experience.

message lost the x sign

30/80 x 50000 is what i mean

Thanks bojo for putting all that effort in to explain! Much appreciated.

If your DH was in the TPS in 2012 and still in it in 2015, any service he has, can be counted in Final Salary Section up to April 2022. The TPS website doesnt show the calculation for this yet, but will do in next couple of years.

If he can work out how much service he had to April 2022 (and for most men who don’t work part time it’s pretty easy) then an easy starting point is the formulary mentioned in the post above. Yes, Method B of av of best 3 in 10 adjusted for inflation might be better, but if you don’t have access yet to TPS website to get those figures, then using current salary gives a rough idea.

Final salary divided by 80 multiplied by years of service.

If the best 3 years ‘age out’ of the last 10, taking a 1 month break before that happens is useful for building in an extra check-point that v will also be used on retirement to calculate best figures and mean the best 3 years don’t actually ‘age out’ although they might look like they have.

See Dave Fountain Classroom in Rearview for helpful videos explaining.

I think he has that bit sorted now (he's a maths teacher so that helps!) and is awaiting his appointment.

He is part time as it goes! Lucky him....

One of the key protections that can be utilised with the final salary pension is that of the "hypothetical calculation" whereby you can prevent your best 3 years from disappearing as it "locks in" an extra calculation up to the point you take a break from the scheme. Simply opting out of the TPS (England & Wales) for a month can create this protection.

My indie (small prep school) announced that it intends to leave the TPS in September. The staff intend to fight it all the way.

Advice and success stories welcome.

Good luck. Stick together, you’d be surprised how many will swap to the SLT camp. Lots of success stories…. How small are you? Can they definitely afford it? If so, fight all the way! We had to strike and it isn’t fully resolved but we are still in it for now.

260 children. Proprietor owned. If we go down the leave route we will essentially be accepting a 6% pay cut (school pays 4% less into our pension, but we have to pay 2% more each).

Just wondering how the pensions are going now? My school is talking about staying in but expecting us to top up any future employer contributions... which I understand could be loads (?)... anyone in the same boat?

After consultation and negotiation, staff are being allowed to stay in the TPS for the next two years or move over to a Defined Contribution pension. All new teachers will automatically be enrolled on the DC scheme. This gives teachers towards the end of their careers a chance to 'max out' their TPS careers average element before retirement. We have about 1/4 of our staff age 50+.

When the two years is up and school opts out of the TPS, is my 'final salary' taken from the day school withdraws from the TPS or the day before I retire? Ditto careers average?

Final salary is either the final salary you had when last paying into pension but adjusted each year for inflation OR the average of the best 3 consecutive year’s salaries whilst in the pension, adjusted each year for inflation.

Career average doesn’t have a final salary. The yearly pension accrues at 1/57 of each year you’re in it. It then has CPI added to it each year if out of service and CPI +1.6% if still in service.

You won’t get ‘credit’ for salary increases you get after you no longer pay into pension.

Have they said that after 2 years everyone is being withdrawn or that they will then review it again?
Is the option to remain in it and receive the set contribution from the employer and pay the rest yourself still available or has that gone? If so, that’s a real shame.

Are new employees starting this Sept not going to be in it?

Shame, they will find it harder to recruit now.

@WombatChocolate No option to remain after 2 years. Those who opt to remain in the TPS for the next two years have to top up the set contribution from the employer.

I am considering moving over to the DC scheme in September and doing salary sacrifice to pay more in for the next 4 years before retirement. That is why I was asking about 'final salary' as with salary sacrifice my salary will reduce significantly but hopefully I will build up a good pension pot.