Estimate your final pension value calculator notes

This calculator provides an illustration of benefits you may receive under the current and reformed Teachers’ Pension Scheme, following implementation of the reformed scheme in April 2015. The assumptions used within the calculator reflect the Government’s proposals for the scheme as set out in the “Proposed Pensions Agreement” following negotiations with teacher Union representatives.

The calculator does not provide a formal statement of your pension entitlement, the results shown will be based on the information you provide and are for illustrative purposes only.

The calculator provides an illustration of pension benefits that can be taken in full at a single retirement point. This does not influence your ability to use the Phased Retirement provisions of the scheme.

The output of the calculator is in “current earnings terms”. This means that the results are not affected by general salary inflation between now and the time you retire. Any promotional salary increases are taken into account, based on the Projected Salary that you enter into the calculator.

If you would like to see how much pension you have earned to date, you can access that information at My Pension Online.

The calculator enables you to obtain an illustration that reflects your working pattern to date.  The first option relates to you if you have worked on a full time or regular part time basis. The second option relates to you if you have had an irregular working pattern i.e. changes in working hours on more than one occasion, or a period of non-reckonable service since you started pensionable employment.

• The calculator assumes that you will continue in the same working pattern that you enter into the calculator from now until retirement and that you will not leave service.
• The calculator uses a future accrual rate of the new scheme being 1/57ths. This means that your pension entitlement in the new scheme will build up at 1/57th of your salary for each year that you remain in the scheme.
• The calculator assumes that the benefits you accrue up to 31 March 2015 are protected under the existing scheme arrangements.
• The calculator does reflect the additional protections provided in the proposed pensions agreement. This is relevant if you are within 13.5 years of your current Normal Pension Age on 1st April 2012:
  • If you are within 10 years of your current Normal Pension Age on 1st April 2012, and have not had a break in service, you will retain your current pension age and will have your pension benefits calculated at retirement on the basis of the existing scheme provisions.
  • If you are outside the Normal Pension Age by up to a further 3.5 years on 1st April 2012, your current scheme benefits will be calculated on benefits accrued to a specific date determined by your proximity to retirement but will have your Normal Pension Age linked to the increase in State Pension Age.
• If you do not receive the additional protections, the calculator assumes a Normal Pension Age that is linked to the increase in State Pension Age (more information on this is provided below).
• Where relevant, the calculator does apply estimated actuarial adjustments to calculations where the benefits would be taken on an early or late basis against the Normal Pension Age.

• Please be aware that this calculator cannot take account of all circumstances relating to part-time employment. For example, if you have an irregular working pattern in the future, or you move from part-time to full-time employment (or vice-versa), the calculator will not provide an accurate illustration.
• The calculator does not take account of ‘mixed benefits’ – this is where you have service in the existing scheme with part of it relating to a Normal Pension Age of 60, and part of it relating to a Normal Pension Age of 65. If you meet these circumstances and would like an illustration of benefits, please email Teachers’ Pensions.
• The calculator does not include any Additional Pension benefits or money purchase Additional Voluntary Contributions (AVCs) benefits.

The initial illustrations provided by the calculator are based on your assumed Normal Pension Age, whether this is influenced by the additional protections provided by the proposed pension agreement or by the link to the increase in State Pension Age.

The calculator displays an illustration of your accrued benefits under i) the current scheme arrangements; ii) the reformed scheme arrangements and iii) the sum of the current and reformed benefits to show an illustration of your total pension entitlement.

The calculator allows you to vary your retirement age, which allows you to see the impact on the illustrated benefits if you decide to retire at a different point in time, with estimated early and late retirement adjustment factors applied.

Current scheme benefits

The first calculation shows an illustration of benefits that will be accrued under the existing scheme. It uses your projected final salary at retirement to inform the calculation, based on your current accrual rate (i.e. 1/80th or 1/60th), and in terms of service is based on:

• For members with full current scheme protection, all estimated reckonable service accrued up to your current Normal Pension Age.
• For members with partial additional protection, all estimated reckonable service accrued up to a specific date determined by your proximity to retirement.
• For members whose membership of the current scheme is not protected, all estimated reckonable service accrued up to 31 March 2015.

Commutation: exchanging some of your pension for a bigger lump sum

The calculator allows you to exchange some of your pension for a tax free lump sum. This is called “commutation”. Current HMRC rules allow you to take up to 25% of your total fund value as a lump sum the calculator works out your total fund value and will allow you to look at various options so you can decide on the level of pension and lump sum that’s right for you. Move the slider between 0 and 25% to see the differences.

For each £1 of pension you exchange, you will receive £12 of lump sum.

If you have an NPA of age 60 or 65 under the existing scheme, you will have benefits calculated on that NPA for the existing scheme.

However, given that the State Pension Age will change, the pension benefits for the reformed scheme will be calculated on a revised NPA, which will be:

• 65 years if you are:
  • a woman born before 6 April 1953
  • a man born before 6 December 1953
• 66 years if you are:
  • a woman born on or after 6 April 1953
  • a man born on or after 6 December 1953

The government has announced that the increase to 67 will now take place between 2026 and 2028.

This change to the timetable is not yet law and will require the approval of Parliament. However, the calculator does provide illustrations on the basis of this change being approved by Parliament.

For more information on the state pension age changes, please click here.

Although the calculator is designed to allow you to tailor your projections to some extent, it does not take into account your wider personal circumstances and does not constitute financial advice. We are not registered to provide you with advice.

If you require any help reviewing your retirement planning we strongly recommend that you seek independent financial advice.

You should always check that any independent financial adviser you consult is authorised and/or licensed to give the advice you are seeking. Most financial advisers will charge for their advice.