Employers' Guide

Section 6 - Increasing Pension Benefits

1. Additional Pension

Members can elect to purchase additional pension provided that they are in pensionable teaching employment. They can do this by either paying a lump sum or having additional contributions deducted from their salary. They are able to claim tax relief on the additional contributions. If a member is interested in this option please refer them to the Additional Pension leaflet on the website.  If a member decides to purchase additional pension they should complete an application form on the website using the secure member area My Pension Online. Additional pension may be purchased either for personal benefits or for personal and family benefits, but not solely for family benefits.

The maximum annual pension a member can buy is £5,600 for financial year 2011/12 but this is reviewed annually in line with movements in the cost of living. Members can choose to buy this at different times in multiples of £250 of annual pension.

Members can choose to make a one off payment or have deductions taken from their salary. If a member chooses to pay by deductions from salary TP will issue you with a letter stating the amount to be deducted and the period of the election. If a member changes to a part-time contract they will pay the same amount of contributions as they did when they worked full-time. The instalments must be completed before NPA.

As instalment costs are reviewed at each Scheme valuation, the deductions may increase or decrease depending upon the results of the valuation. TP will notify members and employers in advance of any changes that are to be made to deductions.

You may purchase additional pension on behalf of a member, but payment must be made in one sum.

If a member is out of service for 30 days or more the election ceases to have effect. You should notify TP who will calculate how much additional pension the member is entitled to receive based upon the contributions paid up to the day they leave the scheme. They can, however, make a one off lump sum payment to clear the outstanding contributions.

If the member retires before the end of a payment period, they will be able to complete the payments by making a one off payment or can receive a pension based upon the contributions made up to the time they retire.

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2. Past Added Years (PAY)

These were arrangements that allowed members to purchase additional service in the TPS. This provision has been withdrawn, but existing elections are being honoured.

If a member has a Method A election, contributions should continue to be collected until the end of the payment period. If a member changes from full-time to part-time employment and remains in the Scheme, contributions should continue to be deducted but at a pro-rata rate which will cause the payment period to be extended. No other changes or amendments are permitted to these elections. If a member is out of service for 30 days or more the election ceases.

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3. Current Added Years (CAY)

These were arrangements that allowed members who had left teaching to continue contributing to the TPS by paying both their share and the employer’s share of contributions. These arrangements have been withdrawn, but existing elections are being honoured.

The provision for a person called up by a reserve force to cover absences from teaching remains in place.

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4. Family Benefits

All pensionable service from 1 April 1972 (for widow or dependant) or 6 April 1988 (for widower or registered civil partner) or 1 January 2007 (for nominated unmarried partners) automatically counts for long term pensions.

If the member wishes to increase the value of their long term pension they will need to purchase all or part of their service before these dates subject to certain conditions.  Further information is available in the section of the website entitled About the Scheme.

Members can purchase the additional service by either making a one off payment or deductions from their salary. If a member chooses to have deductions from salary, TP will issue you with a letter stating the amount to be deducted and the period of the election.

An estimate of the costs involved can be obtained using the calculation package on the website.

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5. Protection of previous salary

There were two options available prior to 1 January 2007 whereby members could protect a previous higher salary for pension purposes. These were:

  • Stepping down applications; and
  • Paying contributions on a former higher salary

These provisions have been withdrawn, but existing arrangements are being honoured.

If an existing arrangement is in place, TP will have already instructed you to collect the additional contributions on the former higher salary. Each year you will be notified of the notional salary to use.

The election will cease to have effect if the member writes to TP indicating their wish to cancel or, if they cease to be in pensionable employment for more than six months.

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