1. Birmingham City Council Corporate Payroll & Pensions
Presentation

2. Presented by
Denise Tipper

3. Introduction Who we are What we do
Relationship with Teachers’ Pensions

4. Pension Scheme Administration
DCSF & Regulatory Role
Capita Teachers’ Pensions Role
Employer Responsibilities

5. Pension Scheme Administration
TPS Website
- “My Pension Online”
- Pension Scheme Literature
- Pension Scheme forms

6. TEACHERS’ PENSION SCHEME
Final Salary Scheme

7. Teachers’ Pension Scheme Key Benefits
Guaranteed benefits linked to service and salary
Guaranteed pension linked to RPI/CPI
Tax-free lump sum at retirement
Flexible retirement options
Opportunity to pay extra contributions to secure additional pension benefits
Lump sum payable if you die before you retire

8. Teachers’ Pension Scheme Key Benefits
Children’s and dependants’ pensions should you die
Ill- health retirement benefits
Transfer-in pension rights from other pension schemes
Employer contributes towards the cost of your benefits

9. Membership Rules Auto enrolment if employed full time or part time
Membership between 18 and 75
Applies whether or not previously retired
Can opt out – seek independent financial advice or talk to teacher association

10. Pension Contributions
Employee rate 6.4% of pay (tax relief given through payroll)
Employer rate currently 14.1% of pay
Can pay additional contributions (additional pension)
Can pay Additional Voluntary Contributions (AVCs). Group scheme with the Prudential.

11. Pension Contributions
Can also pay to a Freestanding AVC of your choice
Can also pay to stakeholder and personal pensions
Subject to tax limits – not “40 years at 60”
Dependants’ benefits can also be increased by extra contributions (civil partnership, partner etc)

12. Additional Contributions
Additional Pension Benefit (APB) in the TPS – max purchase £5400 per annum
Additional Voluntary Contributions “AVCs”
- Prudential
- can increase pension and/or death in service lump sum
- option of tax free lump sum
- Tax relief on contributions

13. Transferring from another scheme
When you join the TPS you can transfer your pension credit from another scheme.
Must apply within 12 months of entering pensionable teaching employment
Your previous pension scheme must be willing to pay and must meet HMRC requirements
Service credit calculated by pension scheme

14. Options on leaving the Scheme
Leave pension rights in the TPS
Transfer to another pension arrangement
Refund option if not qualified for benefits and have been out of pensionable employment for one month

15. Qualifying for pension benefits
Generally speaking, need two years service to qualify for benefits
Part time service counts in full for qualification
Only part time days worked count in the assessment of benefits – 10 years half time = 5 years for benefit calculation.

16. Scheme Components
Reckonable Service
Average Salary

17. What is Reckonable Service?
Full Time Service
Part Time Service – (previous pension elections)
Added Years/Additional Pension
Transferred In Service
Breaks in Service
Sickness/Maternity/Paternity Leave
Check your Benefit Statement!

18. What is Average Salary Final 12 Months or “Three in Ten”
Pensionable Pay
Includes all Allowances under TPACD
Excessive Salary Increases

19. Calculation of benefits
If scheme member prior to 01/01/07 -80th scheme. Pension and automatic tax free lump sum of three times pension.
Can convert pension to additional lump sum (up to 25% of fund value).
If scheme member after 01/01/07 -60th scheme; no lump sum (can convert pension to lump sum).
Conversion £1-£12.

20. Types of Retirement
AGE – Normal pension age 60 – for those teachers in service as at 01/01/07.
AGE – Normal pension age 65 – for those newly appointed teachers after 01/01/07
ACTUARIALLY REDUCED BENEFITS – retiring between the ages of 55 and NPA

21. Types of Retirement
Phased retirement (drawing part of your benefits while continuing in service).
- pay must reduce by 20% for at least 12 months.
- can take up to 75% of benefits
- need to be agreed with employer

22. Types of Retirement Ill Health before normal pension age
Based on medical evidence (permanent incapacity criteria)
Two levels of benefit based level of incapacity
TIB – incapable of teaching or any other gainful employment
PIB – incapable of teaching but able to undertake other gainful employment.

23. Types of Retirement Ill Health Retirement
- if awarded TIB benefits assessed on service to date plus half potential service to normal pension age.
If awarded PIB benefits assessed on service to date only
Application via employer after consideration of all other options

24. Death Benefits (in service)
Death grant – 3 times salary
Survivor pensions – to widow, widower, civil partner, nominated partner or children
Short term pensions linked to former pay for three months (paid by employer)
Long term pensions – half rate linked to service counting for benefits

25. Pension claim procedure
Must claim to be paid!
Claim form from TP website
Return to Corporate Payroll and Pensions
Final salary/certification- to TPS
Must have retired from service to claim!

26. Payment Matters TP acknowledgment Benefit Statement – check
Employer checks
Retrospective salary increases
Lump Sum Payment
Certificate of Re-employment (not ARB)

27. Retirement Matters First pay advice only
Pay day – date before birthday each month – except if week-end
Income Tax – Send P45 to new tax office
Pensions Increase – linked to RPI
5 year pension guarantee
Short and long term pensions
Pensioner news letters

28. Re-employment
Complete and forward Certificate of Re-employment to new employer
Abatement rules for age retirement cases
Employment Agencies and TPS
Remember to declare employment
National Fraud Initiative
Fresh scheme membership

29. What about the Future? Public Sector Pensions Review will consider
-The gap between public sector and private sector provision
The need to ensure that future pension provision is fair across the workforce
How risk should be shared between taxpayer and employee
Wider government policy intended to encourage people to save for retirement, and longer working lives

30. What about the Future? Pensions Review –
Interim report (Hutton ) published
Final Report Spring 2011ahead of next Budget
Existing accrued rights will be protected

31. Emergency Budget 2010 Public Sector pensions to rise in line with
CPI not RPI
Requirement to purchase an annuity at age 75 scrapped
Reduced tax relief on pension contributions for high earners

32. Contact Us Corporate Payroll & Pensions Teachers’ Pension Team
67 Sutton New Road, Erdington
Tel: /4921
Teachers’ Pensions

33. …….And Finally We are here to help Teacher Association
Independent Financial advice