Advice on Pensions for Teachers

Please note: this page is offered as a plain language summary of the latest regulations and is designed to be for initial advice only, especially adapted for the particular situation which applies in Suffolk. It is not official Union guidance to the details of any regulation or scheme, and Suffolk NUT accepts no liability for anything expressed on this page. Before making any decisions about pension options or retirement, members are advised to contact the NUT Regional Office (see CONTACTS ) and to obtain the relevant documentation from Teachers' Pensions (TP, which used to be called the Teachers' Pension Agency).

Pensions Information Index:

** Important Up-date: The minimum age at which benefits can be drawn from an occupational pension will, as specified in the Finance Act 2004, increase across the board from the current 50 to 55 from 6 April 2010.  This applies to the Teachers’ Pension Scheme and raises the minimum age at which members of the scheme prior to 6 April 2006 can get premature retirement on the grounds of redundancy or reorganisation.

So any teacher aged under 55 seeking to take premature retirement, should ensure that the pension is put into payment before 6 April 2010.

If a teacher qualifies for early retirement on grounds of ill health, this can be accessed at any age.  

The minimum age to take actuarially reduced early retirement is already 55 for all members.

Actuarially Reduced Pensions
Address of Pensions Agency

AVCs (Additional Voluntary Contributions)
"Average Salary" for Pension calculations

Changes to Teachers' Pensions from January 1st 2007
Commutat
ion of Pension
Documents and Publications from TP

Early retirement on the grounds of efficiency: general info ** See important up-date above.
Earnings from teaching when in receipt of a teachers' pension
Ill health pension - enhancements and procedures (up to December 31st 2006)
Ill Health Pension: a Personal View (From Bury St Edmunds NUT site)
Options for the over 55s ** See important up-date above.
Part-Time Pensions: European Court
Part-Time Pensions, Opting to stay in the Pension Scheme
Part-timers - calculation of pension
Stepping down arrangements (Up to December 31st 2006)
Paying Teachers' Contributions during a period of absence from teaching ('Combined Contributions')


{short description of image} Teachers' Pensions have a website (http://www.teacherspensions.co.uk)(or you can contact them by post at:

Teachers' Pensions

Mowden Hall

DARLINGTON

Co Durham DL3 9EE

The main Teachers' Pensions documents you might need when starting to investigate pension arrangements are:

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AVCs: Additional Voluntary Contributions

AVCs are a way of paying into a "top-up" pension fund where the benefits depend on how much you pay in and the market value of the fund at the time. It is not tied in any way to your earnings, only to your contribution level and record. We do not offer financial advice ourselves to members, and you should consult a reputable financial adviser for opinions as to the value of AVCs for individual cases and for projections as to actual pension entitlements.

However, the official provider of AVCs for teachers is Prudential. This scheme is operated by Suffolk CC Payroll and it is the only scheme recognised by the employer. Members are therefore advised that if they decide to take out AVCs, they should use the Prudential scheme and not any "free standing AVCs" from other companies.

To set up a new AVC pension account, phone: 08450 700007.

For enquiries on existing AVC accounts and transfers (e.g. when changing employer), phone: 08456 000343.

Postal address: AVC Department, Prudential, Abbey Gardens, 55 Kings Road, Reading, RG1 3AH.

Prudential Sales Representatives will visit schools on request and inform staff meetings, etc., of the AVC scheme.

If you change employer (e.g. from one LEA to another), it is up to you to ensure that the new employer knows of your election to pay AVCs. You need to contact the Prudential as above and ask for an Employer Amendment form. Completing and returning this form in good time should ensure that your AVCs continue in your new employment without any gaps.


Early Retirement for Teachers in Suffolk


Since the introduction of the new regulations which made the Local Education Authority pay part of the actual pension for all teachers retiring before the normal retirement age (60), except in the case of ill-health retirement, early retirement in Suffolk has become very difficult to obtain, "om the grounds of efficiency". Each case will be considered on its merits, and the school may be expected to meet part of the cost of early retirement "in the interests of efficiency".

Early retirement (except for ill-health reasons) is ONLY available in the following situations:


The factors to be considered in determining whether you are likely to obtain early retirement are:

  1. the teacher's age (application on behalf of teachers under 55 are unlikely to be considered
  2. the extent to which "the teacher's loss of efficiency has, or could have, a detrimental effect on the school as a whole"
  3. the teachers' state of health
  4. length of service with Suffolk LEA

No enhancement of pension will be recommended by the LEA. It is technically possible for the School's Governing Body to agree to meet the cost of enhancements to pensions, but none has done so or indicated a willingness to meet such costs. It might be possible for the school and LEA to divide the cost. The costs need not be "open-ended", i.e. continue until the death of the pensioner, but can be "capitalised", i.e. the school, LEA or both can make to Teachers' Pension a one-off payment.

Any member thinking of applying for early retirement in Suffolk should discuss the situation with the Division Secretary. You can e-mail direct to the Division Secretary by selecting this link.

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Stepping down arrangements (DISCONTINUED from 31/12/06)  Replaced by Flexible Retirement.

Arrangements have been introduced which allow teachers to step down from a post of responsibility to main scale AND protect the level of their pension when they come to retire. Without such provisions, if you paid in for 25 years at, say, a +4 allowance, then worked the last 5 years at CPS point 9, your pension would be calculated only on the basis of your last year's salary (i.e. at Common Pay Spine rate).

There are two ways of making sure you get some benefit from having previously paid higher contributions:


You can elect to have your eventual pension calculated in two parts:

(1) The pension which would have been payable had you retired at the time you stepped down, index linked up to the date of actual retirement, PLUS

(2) The pension payable on the lower salary on the service accrued since stepping down.

Example: A teacher with 30 years's service steps down from a +4 post of responsibility to CPS point 9 and continues on CPS point 9 for another 5 Years. The pension will be calculated as:

  1. 30/80ths of the "average"** salary paid in the year before stepping down, indexed linked to the Retail Price Index for the subsequent 5 years, PLUS
  2. 5/80ths of the "average" ** salary paid in the year before retiring.

This option has to be exercised within three months of stepping down and is irrevocable. You do not pay any extra contributions.


This allows a teacher (but only if aged 50 or over) to step down to a lower salary level, whether with the same or another employer, to elect to continue to pay contributions at the former level, and therefore to receive the same pension as (s)he would have received had (s)he remained in post at the higher salary level. The benefits will normally be better than protecting accrued entitlement as above, but to exercise this option, it is necessary to maintain the superannuation contributions at their former, higher rate, and to continue to pay at this higher rate, including any increases, up to the age of retirement. The employers' contribution also has to be paid.

The employer can agree to pay the extra employees' contributions, but if the employer does not agree to do this, the teacher will have to pay both the extra teachers' contributions (at 6%) and the extra employers' contribution (7.2%). Remember, however, that superannuation payments are taken off before income tax is deducted from your pay.

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** Definition of "average" or "reference" salary

For pension purposes, this is defined as:

"The highest amount of the full salary for any consecutive 365 days of reckonable service, whether continuous or not, during the last three years of reckonable service."

Most pensions benefits are based on your final average salary. For regular part-time teachers, the average salary is based on the full-time equivalent salary for the best consecutive 365 days of pensionable employment in the last three years of service.

Part timers do NOT get a part-time pension! They accrue pension rights more slowly, however. It takes 2 years on 0.5 to accrue one year's (i.e. 1/80th) pension benefit, but all pension calculations are then based on full-time salary rates.

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Re-employment: Earnings from teaching if in receipt of a teachers' pension

Before re-employment as a teacher every teacher in receipt of a teachers' pension must complete TP's Returning to Work Form and forward it to the Area LEA Personnel Officer. If you break the earnings rules for re-employment as a teacher while on a teachers' pension, your pension could be reduced ("abated") or removed altogether.

1. If you take an ill health retirement from teachingyou must not take any teaching work (or work which TP may consider to be similar to the job of teaching). "Teaching" includes private tuition, individual tutoring and most activities involving working with children or young people. If in doubt, contact the NUT Secretary.

2. If you take normal age retirement or retirement on the grounds of redundancy, TP will inform you annually of your upper limit of earnings from teaching. Basically, your earnings from teaching plus your teachers' pension must not come to more than your full-time salary, averaged over a year. If you exceed this limit, your pension could be reduced or "abated".

3. If you are in receipt of an actuarially reduced pension (i.e., voluntary early retirement where there is no redundancy, before age 60) the rules are more complex.

If you take an Actuarially Reduced Pension and this is your only teachers' pension, then there is no earnings limit from teaching and no "abatenent of pension" should you, say, teach full-time. If you wish your re-employment after taking an ARP to be classed as pensionable you would need to complete an Elected Further Employment (EFE) form and send to TP.

If you are receiving an Actuarially Reduced Pension AND another non-AR pension, the abatement provisions apply to that part of the pension which is not actuarially reduced. All income from all pensions are counted as "pensions income" but if this results in the abatement of pension, only the non-AR pension will be suspended.

Reminder: This page provides initial and general advice for members' information. Individual should always check their own situation with the Union.

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Payment of "Combined Contributions

Continuing to pay into the Teachers' Pension Scheme when (temporarily) doing something else (e.g. secondment, teaching abroad, or time out).

If you leave pensionable employment in the TPS you may (subject to certain conditions) pay the teacher's and employers' share of the contributions in respect of part or all of your absence from pensionable employment. This is known as "combined contributions".

The effect of paying is that the period covered by combined contributions counts towards both qualification for, and in the calculation of, retirement benefits. in the event of a breakdown in health or death while paying combined contributions, benefits are calculated as if you were actually employed in pensionable employment, i.e. on an enhanced total of service.

Eligibility: (1) If you first entered pensionable employment before age 55, you may elect to pay combined contributions. However, the facility may be restricted if you have done little pensionable employment and your age would make it impossible to qualify for pension benefits by age 60. For this purpose, pensionable employment includes pensionable teaching employment in Scotland, Northern Ireland, the IoM and Channel Islands.

Combined contributions cannot be paid for an absence on account of a trade dispute, an absence after age 60 or where the last pensionable employment was in a relief capacity If you have claimed early retirement benefits from the TPS and then re-entered pensionable service , you will be unable to use this facility. If you are on maternity leave, but no longer entitled to any contractual salary or statutory maternity pay, you may elect to pay combined contributions.

(3) It is not possible to pay combined contributions if you are a member of another occupational pension scheme.

You need to elect to do this within 6 months of leaving pensionable employment if teaching abroad, or 3 months where the period to be covered is an absence for other reasons.


Ill-health retirement benefits

If you are under 60 and have to retire through ill-health, you can apply for ill-health benefits. Ill-health benefits are awarded on the grounds of permanent incapacity for teaching but cannot be awarded to a teacher who has been barred for misconduct or who is under investigation by the DfES with a view to barring. Where a teacher under investigation is not subsequently barred, and an application for ill-health benefits is accepted, the benefits will be backdated. The benefits are calculated in the same way as benefits for age and premature retirement.

You cannot normally obtain ill-health benefits if you have already been awarded premature retirement benefits. Provided your ill-health began during your pensionable employment, we work out the benefits by adding extra service to compensate you for the fact that you have had to retire early. You must apply for ill-health benefits, however, within six months of leaving pensionable employment. The increase in service is worked out as follows:

Actual reckonable service Enhanced service
Up to 9 years 364 days Double your actual reckonable service
(but not more than if you taught until you were 65)
10 years to 13 years 122 days 20 years
(but not more than if you taught until you were 65)
More than 13 years 122 days Whichever is greater of 20 years (this cannot be more
than if you had taught until you were 65): or
your actual reckonable service plus 6 years 243 days
(this cannot be more than if you taught until you were 60). 

The actual reckonable service above does not include service purchased by the payment of additional contributions. If you are an ex-teacher and your ill-health began more than 6 months after you left teaching service, your service will not be increased. Benefits will only be based on your actual reckonable service.

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