Buy Out

Members in Career AverageFrom 1 April 2015 the method of benefit accrual for new entrants or transitioning members became Career Average Revalued Earnings. This is a defined benefit pension where a fraction of pensionable earnings are banked each year and revalued annually on a compound basis. can pay additional contributions that will allow them to retire before their NPA (Normal Pension Age) without their benefits being reduced by the standard rate of Actuarial ReductionThe percentage reduction that an Early Retirement (Actuarily Adjusted Benefits), Premature Retirement or Phased Retirement pension is subject to, depending on the age at which a member takes their benefits. that applies between age 65 to age 68. They can  Buy outIn the Career Average arrangement, the Normal Pension Age (NPA) is either a member's State Pension Age or 65, whichever is the higher.  Members can buy out up to three years of the standard rate of actuarial adjustment between years 65 and 68 (or less if their NPA is lower). 1, 2 or 3 years of this standard rate  dependent on their NPA. Contributions are paid throughout their career. If the member leaves pensionable service and then returns after a break of not more than 5 years, the Buy Out can resume. But members will need to inform you to start deducting contributions in this new employment.

You will need to make members aware that if they wish to elect for Buy Out, they must make an election within 6 months of first entering the career average arrangement. Teachers' Pensions will contact tapered protection members, either directly or through their employer, to advise them of their choices when entering the career average arrangement. You must inform us of starters and leavers when they occur as otherwise members may be incorrectly allowed to continue with a purchase or have one stopped in error. Contributions are on a percentage basis.

Buy Out is only available to career average members.