Returning to work

Thinking of returning to work after retirement? Our FAQs outline what you need to be aware of.

  • Answer:

    If you’re receiving Age final salary benefits and you remain in pensionable employment, or you're receiving Age or Premature final salary benefits after leaving pensionable employment and then return to work, your pension may be suspended. This is dependent upon your earnings but only where the employment is pensionable in the Teachers’ Pension Scheme. If the employment is eligible to be pensionable the earnings will be included in the assessment, irrespective of whether you have opted-out or remain in the Scheme for that employment.

    If you retired on ill-health grounds your pension will stop as soon as you return to work. This applies to benefits awarded under either or both the final salary or career average arrangements.

    If you’re receiving Early Retirement (Actuarially Adjusted Benefits), your pension will not be affected. If you return to work and subsequently take Age, Premature or Ill-health Retirement, your benefits may be affected.

  • Answer:

    Your final salary pension will be affected if your pension and re-employment earnings exceed your salary of reference*. Any career average pension that you’re receiving will not be affected.

    When we calculate the value of your pension, we use your final salary pension, any career average pension and also include any mandatory and discretionary payments that your employer is paying at your point of retirement.

    *Your salary of reference is the highest salary in the average salary period (find out more about the average salary period here), as calculated at retirement. Your salary of reference is index-linked, which means that it will be adjusted each year in line with relevant pension increase factors. It is therefore important to note that your salary of reference may change.

    Your index-linked salary of reference minus your annual rate of pension is the limit that your earnings may reach in a tax year before your final salary pension is affected. If your earnings in the tax year exceed that limit, your final salary pension will be suspended to prevent any overpayments being made to you which you later have to pay back.

    Example

    Beth applied for and received her final salary retirement pension in 2019. Her pension was valued at £25,000 per year. Her salary of reference at the time of her retirement was £40,000.

    Two months after her retirement, Beth decided to go back into teaching employment on a part time basis. Her pensionable earnings whilst she worked were £16,000 per year.

    As Beth’s salary of reference is £40,000, her combined pension and pensionable earnings must be assessed against this amount.

    £25,000 + £16,000 = £41,000.

    As the value of her combined pension and pensionable earnings is more than her salary of reference, Beth’s pension will need to be abated (suspended) for that tax year.

  • Answer:

    If you don’t want to contribute to the Scheme you’ll need to formally ‘opt out’. You can do this by using My Pension Online. However, your pension may still be affected by your earnings.

  • Answer:

    If you work part-time you’ll be treated in the same way as a full-time member and your earnings will be used to determine if your pension should be suspended or not.

  • Answer:

    Your Salary of Reference can be found on the award papers that you were issued to you when we confirmed the amount and date of payment of your Teacher’s Pension. You can look at and download your award papers at any time by signing into your My Pension Online account and viewing your messages.

  • Answer:

    If your service is pensionable, you’ll get further retirement benefits on application. These will be based on your extra pensionable employment and the salary that you earn. This is known as Additional Service After Retirement (ASAR).

    If you’re re-employed after taking retirement benefits, other than Phased Retirement, you must have one year of ASAR to qualify for further benefits. If you’re working part-time, the whole period counts towards your qualifying service, including the days you don’t work. However, your benefits are based on the pensionable earnings you receive.

    You don’t have to claim your benefits immediately. You stop ASAR if you plan to do further work as all your ASAR benefits will be added together when you finally decide to claim them. If you have less than one year’s service (365 days), and don’t intend to continue in the Teachers’ Pension Scheme, your contributions and interest will generate an annuity to add to your existing pension.

    Unless you were in ASAR immediately before 1 April 2012 any service undertaken after 1 April 2015 will be in the career average arrangement. The standard retirement types, Age, Premature, Early (Actuarially Adjusted), Phased and Ill-health, apply to ASAR benefits.

  • Answer:

    If you return to work, there are five things you must tell us:

    1. The name and address of your employer
    2. The date your employment started
    3. The duration of your employment (if you know it)
    4. The rate of salary
    5. The nature of the employment (indicating whether it’s full or part-time)

    To make it easy, you can complete the Certificate of Re-employment to ensure we have all of this information. This can completed via your My Pension Online account or you can download the paper form.

  • Answer:

    Your employer will have paid mandatory compensation if you’re receiving Premature Retirement. Your employer may also have agreed to increase your pension as compensation for your early retirement. In either or both of these cases, the value of those payments will be taken into account when assessing the impact on your pension.

  • Answer:

    If you’re receiving ill-health benefits, it’s because you had been judged permanently medically unfit to teach. If you return to teaching, your ill-health pension must stop immediately.

    If you wish to return to teaching, your employer must be satisfied that you’re fit to teach in the capacity required. It’s your responsibility to notify us in writing straightaway of any employment undertaken when in receipt of ill-health benefits.

  • Answer:

    Your application will be void and your benefits will be suspended. There may also be an unauthorised payment charge from HMRC of 40% of the lump sum you’ve received.

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