Teachers' Pensions

Member Types

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Member types

Since 1 April 2015, in respect of the Teachers’ Pensions Regulations 2014, members fall into one of three categories:

  • Protected member;
  • Tapered protected member; or
  • Transition member.

Protected

A protected member is one who was an active member at 1 April 2012 and who was within 10 years of Normal Pension Age (NPA) on 1 April 2012. These members remain in the final salary arrangement, provided they do not have a subsequent continuous break in pensionable service of more than 5 years, until they take their pension entitlement in full.

Tapered

A tapered member is one who was between 10 and 13.5 years of their NPA at 1 April 2012. These members remain in the final salary arrangement until a later date, their transition date, and then move to the career average arrangement. If they have a break in pensionable service of more than 5 years before their transition date they will move into the career average arrangement on returning to service.

The transition dates are individual to each tapered member and depend on their age and if they were under the 60th or 80th final salary arrangements. Click here for the transition date table.

Transition

All other existing members were treated as Transition members and moved to the career average arrangement on 1 April 2015.

New starters (post April 2015)

Anyone who joins the Teachers’ Pension Scheme after 1 April 2015 entered the career average arrangement.

Final salary link

For transition members who have benefits in both final salary and career average and don’t go on to have a continuous break in pensionable service of more than 5 years, we’ll use the salaries they are earning in career average to calculate the Average SalaryThe salary used to calculate a final salary pension. This is calculated on the most beneficial of the following; either the last 365 days salary or the best 3 years’ salary over the previous 10 years (revalued where there has been a change in salary in the 3 year period). If a member has undertaken part-time employment, their full-time equivalent salary will be used in the calculation, but the pensionable service will be based on the part-time hours. used in determining final salary benefits (rather than the salary they were on when they left the final salary arrangements).

The average salary is the greater of the last 365 days of pensionable salary, or the average of the best 3 consecutive year’s salaries re-valued in the 10 years prior to leaving service. This means a transition member will still benefit from any growth in their salary. This is called the final salary link.

Hypothetical calculations will continue to be applied where there are any gaps in the service being used to determine the average salary.

Example:

A member has 5 years’ pensionable service in the NPA 60 final salary arrangements and as they are a transition member, they moved into the career average arrangements on 1 April 2015. At this point the member was earning £30,000.

The member continues to work and builds up 20 years of benefits in career average without a break in service and when the member retires their salary has increased to £60,000.

The member’s pension benefits will be calculated as follows:

Final salary pension = five years’ service x £60,000 (average salary at the point of retirement) / 80th = £3,750 pension (plus an automatic lump sum) + 20 years of career average pension = £18,000

Total = £3,750 + £18,000 = £21,750

If a transition member has a continuous break in service of more than five years starting on or after 1 April 2015 then the salary link is broken. Final salary benefits are then calculated using the existing average salary method, using the salaries earned in career average up to the point of the disqualifying break.

Example:

If a member has five years’ pensionable service in the NPA 60 final salary arrangements and is also a transition member as they moved into the career average arrangements on 1 April 2015. At this point the member was earning £30,000.

The member worked for another year building up career average benefits, then they decided to work overseas for 10 years and then later returned to the UK and re-joined the career average arrangements where they completed a further eight years.

The benefits are calculated as follows:

Final salary pension = five years’ service x £30,000 (average salary at the point of her break) / 80th = £1,875 pension (plus an automatic lump sum), with the resulting pension then increased in line with inflation + nine years of career average pension = £10,000

Total = £1,875 + £10,000 = £11,875

Continuous UK Public Sector Pensionable Service and Salary Link

If a member with final salary link protection decides to leave the Teachers' Pension Scheme but returns within 5 years, the member will retain their final salary link.

If a member returns after a gap of more than 5 years, they will lose their final salary link unless they can demonstrate that they have been employed in continuous pensionable public service in the UK, without a break of more than 5 years (in the intervening period).

If a member leaves a scheme (Scheme A) and joins another public sector pension scheme (Scheme B) but wishes to retain their salary link with Final Salary benefits, they will be required to transfer their benefits into Scheme B (assuming Scheme A and B are club schemes, there has not been a gap of more than 5 years and that the transfer is completed within 12 months of joining Scheme B).

Last Updated: 22/05/2017 14:07

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