Contributions and Calculations

Got a question about contributions and calculations? You've come to the right place.

  • Answer:

    Final Salary pension benefits are calculated based on your final average salary, multiplied by your service, multiplied by the appropriate accrual rate. The accrual rate is dependent on the section of the Final Salary arrangement:

    • Normal Pension Age = 60: Accrual rate is 1/80th
    • Normal Pension Age = 65: Accrual rate is 1/60th

    Career Average benefits are calculated by using an accrual rate of 1/57th * applied to your pensionable earnings in the Scheme year. At the end of each Scheme year the accrued earned pension is then revalued. The pension accrued in the following Scheme year is then added to this and at the end of that year the total amount is then revalued.

    * or 1/55th, 1/50th or 1/45th if you have taken out a Faster Accrual election in a particular year.
    Adjustments for early or late retirement, pension sharing, earmarking, Scheme pays or lifetime allowance charges are then applied to the pension.

  • Answer:

    The [final] average salary is the salary we use when calculating Final Salary benefits when you retire. There are two different methods for calculating the average salary and we will use the method that provides you with the most beneficial result. The two methods used are:

    -The salaries for the last ten pensionable years are increased at each salary change to current day value in line with inflation. The average of the best consecutive three years re-valued salaries in those ten years will be used;
    -The pensionable salary received in the last 12 months of employment before the date of retirement.

    But if you have no pensionable service on or after 1 January 2007, your average salary will be the best 365 days in the last 1095 days before you left service.

    If you're a transition member and moved from the Final Salary to Career Average arrangement then, as long as you've not had a single break of more than 5 years you have Salary Link. This means that when you retire the salaries you’ve earned during your Career Average service will be used when determining the best average salary for your Final Salary benefits. But if you have had a single break in service after 1 April 2015 of more than 5 years then only the salaries in your Career Average service up to the start of that break will be used.

  • Answer:

    If you work part-time, you’re treated in the same way as a full-time member.

    All your periods of service, both full and part-time, are added together when calculating if you have qualified for benefits. When calculating your average salary in Final Salary, we use full-time equivalent salary rates and not your part-time salary. In Career Average your benefits are based on 1/57th of your earnings, the same as full-time members.

    If you die in service while in the Final Salary arrangement, a death grant of three times the average salary is payable.

    If you die in service while in the Career Average arrangement, a death grant of three times your annual rate of pensionable  earnings (if you were employed full time) is payable at the time of your death. Again that’s the same as a full-time member.

  • Answer:

    If your salary has increased in any of the three years used in your average salary period by more than the current limit the salary used to calculate any Final Salary benefits will be restricted.

    The figures are increased annually, in line with regulations. If the average salary is restricted, any unused contributions will be refunded.

    You can find the current limit here.

  • Answer:

    The average salary is calculated using the better of:-

    • the average of your best consecutive 3 years re-valued salaries in your last 10 calendar years or;
    • your last recorded 12 months of pensionable service before your retirement.

    This means that management allowances might still be used in your pension calculation.

  • Answer:

    The maximum total pensionable employment that can be used in the calculation of Final Salary pension is 45 years. This restriction doesn’t apply in the Career Average arrangement.

    If you continue teaching after your 75th birthday, any service after that date is not treated as pensionable but your retirement benefits are payable from your 75th birthday.

  • Answer:

    You can find estimates of your benefits by going to My Pension Online and if you haven’t already, signing up for an account. You can also use our calculators to create benefit projections using different retirement dates and salaries. 

  • Answer:

    Provided you have service, on or after 1 January 2007, you'll be able to exchange some of your annual pension for an increased lump sum when you retire, subject to the HMRC maximum. If you don't have any service after 1 January 2007 you can't convert any of your pension to receive a higher lump sum.

  • Answer:

    Providing you have pensionable service on/or after 1 January 2007 then yes the commutation option is available to you. This allows flexibility to increase your lump sum by sacrificing one pound of your annual pension for twelve pounds of lump sum. You can do this up to the limit of 25% of the fund value. You are able to work out your limit by using the calculators or by following the formula below.

    For members in the 1/80th Scheme arrangements the formula is pension x 33 / 14 = max additional lump sum.

    Max additional lump sum / 12 = cost to the annual pension

    For members of the 1/60th Scheme the formula is pension x30/7 = lump sum.

    Lump sum / 12 = cost to your pension benefits.

  • Answer:

    Our calculator will help you to work out the maximum lump sum you're able to take.

  • Answer:

    Yes, you can convert both your Final Salary and Career Average benefits. You don’t have to convert the same proportion of each benefit but they are subject to the HMRC limits.

  • Answer:

    Whether you’re a full-time or part-time member, you’ll pay a percentage of your gross salary into your pension each month.

    The good news is that your employer will also be contributing towards your pension too and you will receive tax relief on your contributions.

    The pension contribution bands for 2020 are shown in the table below. They usually change each April (keep an eye on the website, and we’ll announce any changes with plenty of notice).

    Annual Salary Rate for the Eligible Employment from 1 April 2020  Member Contribution Rate 
    Up to 28,168.99  7.4%
    £28,169 to £37,918.99  8.6%
    £37,919 to £44,960.99   9.6%
    £44,961 to £59,587.99   10.2%
    £59,588 to £81,254.99   11.3%
    £81,255 and above  11.7%

    Like any financial transaction you make, it’s important you’re paying the correct amount. So check your payslips and if you think a mistake is being made, contact your employer’s Payroll Department immediately.

  • Answer:

    Yes. If you have more than one employer and you're not sure whether or not they’re deducting contributions, please contact them immediately.


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