1. Teachers’ Pensions

2. The main benefits of your pension
Your pension will be a regular source of income when you retire – but you can also take some of it as a tax-free lump sum
Your pension is index-linked, so it’s protected against rises in inflation
It's a Defined Benefit Scheme, based on your salary and service rather than investments
Your employer makes generous contributions into your pension on your behalf
To boost your pension benefits you may be able to make extra contributions
You receive guaranteed benefits through the Teachers’ Pension Scheme – and membership is automatic but not compulsory
If you’re sick and are entitled to ill health benefits, you’ll get them as soon as possible
If you have a family or other dependants, your pension may give them an income after you die

3. What type of pension does the Scheme provide?
There are two types of arrangement in the Teachers’ Pension Scheme
Final Salary – split into two sections
Benefits are based on length of service, best final average salary and accrual rate
If you joined before 1 January and you don’t have a disqualifying break – your Normal Pension Age (NPA) will be 60 with an accrual rate of 1/80
If you joined on or after 1 January 2007 – your NPA will be 65 with an accrual rate of 1/60.
Career Average
Benefits are accrued or banked each year based on 1/57 of pensionable earnings. Each year the banked ‘pot’ is revalued, and for active members this is in line with the Consumer Price Index (CPI) rate of CPI + 1.6%
The NPA within the Career Average arrangement will be either their State Pension Age or 65, whichever is the later date
It’s possible for you to be in a combination of one or both sections of the Final Salary arrangement and also the Career Average arrangement.

4. Members of the Scheme Where do you fit? Active Protected Members
If you were an active member within 10 years of your NPA at 1 April 2012 you’ll have remained in Final Salary arrangement after 1 April 2015
Active Tapered Members
If you were an active member between years of your NPA at 1 April 2012 you’ll have remained in the Final Salary arrangement until your transition date
Active Transition Members
If you were over 13.5 years from your NPA at 1 April 2012 then you’ll have been moved into the Career Average arrangement on 1 April 2015
New Starters
Join the Career Average arrangement on entry to the Scheme.

5. Annual Salary Rate for the Eligible Employment
Contribution rates
Annual Salary Rate for the Eligible Employment
from 1 April 2019
Member Contribution
Rate
Up to £27,697.99
7.4%
£27,698 to £37,284.99
8.6%
£37,285 to £44,208.99
9.6%
£44,209 to £58,590.99
10.2%
£58,591 to £79,895.99
11.3%
£79,896 and above
11.7%
The percentage you pay is based on your pensionable earnings each month.
May = £2,500 x 12 = £28,000. The contribution rate for this would be 7.4%
June = £3,500 x 12 = £42,000. The contribution rate for this would be 9.6%

6. Flexibilities – increasing your benefits
Additional Pension Benefits – open to all types of members
You can Make one off payments or have deductions taken from salary each month
You can buy additional pension in multiples of £250
You can buy for personal benefits or personal and dependents
Your cost is based on your age, the older a member the more expensive
Faster accrual - Only available to Career Average members
This builds your pension up at a higher rate – rather than a 1/57th can be 45th, 50th or 55th
You’ll pay a higher % in your contributions each month
Elections run from April-March
Early Buy Out – Only available to Career Average members
You can buy out the actuarial reduction between age 65 and your NPA
You’ll pay a higher % of your salary each month
You must make an application within 6 months of entering Career Average Scheme
Additional Voluntary Contributions (AVC’S)
This is run by the Prudential which is completely separate to Teachers Pensions.

7. How are pensions calculated?
Pensions are calculated appropriately depending on when you joined the Scheme and which arrangement you’re in.
Final Salary arrangement
If you fall within the Final Salary arrangement then your benefits will be based upon the your final average salary and your reckonable service and accrual rate.
If you joined the scheme before 2007
You’ll have an NPA of 60
An Accrual rate of 1/80th
And received an automatic lump sum of 3/80th
If you joined the scheme on or after 1 January 2007
You’ll have an NPA of 65
An Accrual rate of 1/60th
You won’t receive an automatic lump sum (however, you can convert part of your pension to receive a lump sum).

8. How are pensions calculated?
Career Average arrangement
If you fall within the Career Average arrangement then your benefits are based on 1/57 of pensionable earnings each year (including overtime). Your cumulative accrued pension is revalued each year based on whether you’re active or deferred
Active member – indexation* + 1.6%
Deferred member – in line with annual Pensions Increase
* This is based on a Treasury Order but is expected to match
the rate of CPI in the preceding September.

9. What do we mean by final average salary and salary link?
Final average salary is:
Used to calculate your benefits if you fall under the final salary scheme, which is the highest of the following two calculations:
The average of your last 365 days full time equivalent (FTE) salary before your date of retirement (subject to an excessive salary check) Or
The average of your best three FTE consecutive years salaries, which are index linked, over the last ten years
Salary link is:
Used to calculate your benefits if you fall under both Final Salary and Career Average arrangements, providing you don’t have a break in service of more than five years.
Your final average salary will be determined using service in the Final Salary and/ or Career Average arrangement, rather than your service in the Final Salary arrangement only.
This allows for you to benefit from career progression and any accompanying salary increases in both the Final Salary and Career Average arrangement elements of your overall pension.

10. Final salary link
Average salary (for Final Salary) is applied to Final Salary service only to determine Final Salary benefits

11. Final salary link
Average salary (for Final Salary) is applied to Final Salary service only to determine Final Salary benefits

12. Let’s work through a Final Salary example
Based on reckonable service of 26 years 161 days and final average salary of
£32,160.20
Final Average Salary
Reckonable Service
80 (NPA 60) OR
60 (NPA 65)
Pension
£32,160.20
26.441
80 (NPA 60)
= £10,629 pension
= £31,887 lump sum
£32,160.20
26.441
60 (NPA 65)
£14, pension

13. Career Average calculation
Active member – Example 2.2% CPI in addition to 1.6% (Total 3.8%).
Years in Career Average
Opening Balance
Active Index 3.8%
Increased Pension
Pensionable Earnings
Earned Pension
Opening Balance for Next Year 1
0.00
£30,000.00
£526.32 2
£20.00
£546.32
£31,000.00
£543.86
£1,090.18 3
£41.43
£1,131.60
£32,000.00
£561.40
£1,693.01 4
£64.33
£1,757.34
£33,000.00
£578.95
£2,336.29 5
£88.78
£2,425.07
£34,000.00
£596.49
£3,021.56

14. Normal Age Retirement Full benefits based on your service and salary
In order for Age Retirement benefits to be paid you must be over your Normal Retirement age and either:
Leave all service and have at least a one day break if you’re returning to work (this can’t just be a days unpaid leave). If you’re having a break you must also come back under a new contract of employment.
Opt out – The opt out will be effective from the day after Teachers’ Pensions receive the application form, and is the same date that the award would be payable from. You can always opt in again at a later date.
In both cases, if you returned to pensionable employment you’d
be entered into the Career Average pension arrangement.

15. Early (AAB) retirement
Reduced benefits as taken before your normal retirement age
These can be taken from age 55 onwards (from 2028 the minimum age will be 57)
Your employer can refuse for up to six months
Your pension would be reduced for life (this will be index linked each April)
The younger you are when you take your benefits the
greater the reduction
If you take Early Retirement from Final Salary you must
also take Career Average benefits, if any, at the same
time.

16. Phased retirement
Phased retirement: paid a proportion of retirement benefits
You can phased retirement from aged 55
You could take up to 75% of your total benefits before retirement
Your salary would reduce by 20% (for a minimum 12 months) when compared to salary paid over the previous 12 months prior to Phased Retirement
If you’re in a Final Salary arrangement you can make two phased retirements, but after this any remaining benefits would have to be taken via AGE or Early Retirement award.
If you’re in a Career Average arrangement you can make three Phased Retirements (but only two can be before age 60) after this any remaining benefits you have would have to be taken via AGE or Early Retirement award
You must have your employers consent
There is a penalty for exceeding 80% of your previous salary, and your pension will stop

17. Additional Service after Retirement (ASAR)
If you come back into service after claiming retirement benefits you’ll be contractually enrolled back into the Scheme.
In order to qualify for a second pension you must complete at least one year of pensionable service (does not have to be continuous).
If you do less than this you would be entitled to an Annuity – a small annual amount based on the actuarial equivalent of your contributions, paid for life.
ALL benefits

18. Ill-health Retirement
If you leave pensionable service because of ill health and within 2 years apply for Ill-health because of the same (or connected) illness or if you apply while still in service, your application will be treated as an in-service application.
There are two different levels of in service ill-health benefits that can be awarded:
Tier 1 - Accrued benefits – this is awarded if you’re assessed as being permanently unable to teach but can do other work – this will then be based on accrued pension with no enhancement.
Tier 2 Enhanced benefits – this is awarded if you’ve been assessed as being unable to undertake any type of gainful employment – if you’re in the final salary arrangement then your service will be enhanced, by adding half of the prospective service to your normal pension age, with the appropriate accrual rate of 1/80th (NPA60) or 1/60th (NPA65). If you’re in the career average arrangement it is your accrued earned pension that is enhanced, based on the annual rate of pensionable earnings and half of the prospective service to your normal pension age.

19. Planning for retirement
When you want to retire
We recommend that you start the application process three to four months before your retirement date. You can do this online for Age or Early Retirement applications in most cases
If you’ve more than one employer, your retirement date must be agreed by all of them and an application form must be completed by each of your employers
Your lump sum (if applicable) is paid on the first working day of your retirement
You get monthly pension payments, which are paid the day before your birth date. If you were born on the 7th, your pension will be paid on the 6th of each month.

20. Re-employment If you retire on Age or Premature Retirement
If after retirement (Age or Premature) you’ve returned to work, your pension may be affected. This is dependent upon your earnings but only where your employment is pensionable in the Teachers’ Pension Scheme. You may be required to complete a Certificate of Re-employment – however in most cases we’ll get in touch with you to let you know one needs completing. This can be completed through My Pension Online. If you retired on Early Retirement (AAB) you wouldn’t need to complete a Certificate of Re-employment in any circumstances as your benefits are not subject to abatement.

21. Who can receive a beneficiary pension?
Eligible beneficiaries include:
Your spouse or civil partner
a qualifying partner - provided you would’ve been able to marry or enter into a civil partnership, you’d lived together for at least 2 years and they’re able to show they are financially interdependent
dependent children – up to age 17 or, if over 17 and under 23 provided they are in full-time education or undergoing full-time training. If classed as fully incapacitated and unable to earn a living and not wholly maintained by the state, the pension will continue to be paid after age 23
a financially dependant unmarried close relative nominated by you if you’re a single member.
More detail e.g age of children etc and criteria for partner

22. Career Average Arrangement
Family benefits
How a member’s Family Benefit is calculated
NPA 60 Arrangement
NPA 65 Arrangement
Career Average Arrangement
In Service
1/160 for each year of Family Benefit service + relevant enhancement
37.5% of accrued pension + relevant enhancement
Out Of Service
1/160 for each year of Family Benefit service
37.5% of accrued pension
1 child
1/320 for each year of Family Benefit service + relevant enhancement if applicable
18.75% of accrued pension + relevant enhancement If applicable
2 or more children
1/160 for each year of Family Benefit service + relevant enhancement If applicable divided between the children
37.5% of accrued pension + relevant enhancement If applicable divided between the children
*Family benefit service – 1972 for male members, 1988 for female members

23. Death Grant
If you’re married, in a civil partnership or have a qualifying partner, your partner will automatically receive a Death Grant when you die (without the need for a Death Grant nomination).
If you’re not married or in a civil partnership or you would rather your Death Grant went to someone else, you would need to complete a Death Grant nomination form.
You can nominate more than one person and this does not have to be a family member.
If you’re not married or in a civil partnership and there’s no recipient for a Death Grant it will be paid to your estate.
You can set up a nomination via My Pension Online or completing a copy downloaded from the website and returning it to Teachers’ Pensions.

24. Career Average Arrangement
Death Grant
How a member’s Death Grant is calculated
NPA 60 Arrangement
NPA 65 Arrangement
Career Average Arrangement
In Service
3 x final average salary
3 x annual rate of pensionable earnings (FTE)
Out Of Service
3/80 of the final average salary for every year of service
2.25 x pension accrued
Pensioner
5 x Gross pension minus Gross pension already paid

25. My Pension Online (MPO)
This is our secure portal for Scheme members
Through My Pension Online, you can:
View your Benefit Statement
Update personal information
Nominate and update death grant nominations
Apply for pension flexibilities
Apply to transfer in from a previous pension scheme
Opt out of the Scheme
Apply for Age Retirement or Early (AAB) Retirement
Send secure s to Teachers’ Pensions and receive communications and information.

26. www.teacherspensions.co.uk Lots of resources available
There is lots of information available on our website to help you with your retirement planning along with a helpful video that talks you through the application process.

27. Our contact details Visit us at: www.teacherspensions.co.uk
Call us on:
Monday–Friday, 8.30am–6pm
Write to us at:
Teachers’ Pensions
11b Lingfield Point
Darlington, DL1 1AX