As you may be aware the Scheme changed in 2015 from a final salary arrangement to a career average arrangement. This means the way your pension benefits are calculated are dependent on which Scheme arrangement you’re in. Final salary benefits are based on service, a final average salary that’s determined when you retire, multiplied by either 1/80th or 1/60th, depending on which section of the arrangement the benefits are in, either with a normal pension age of 60 or 65, respectively.

Under career average you’ll accumulate a pension based on 1/57th of your earnings for each year you work, including any overtime. Your total benefits will consist of the pension ‘pot’ that you add to each year. We revalue the ‘pot’ each year to keep it in line with inflation, also adding a further 1.6% on top if you’re active in the Scheme. You’ll be able to see year on year what you’ve earned via your online Benefit Statement (This link opens in a new window).

So what does that actually mean? Well, it means you’re part of one of the best pension schemes around and you have access to the following benefits:

1. Your pension provides you with an income for your retirement and you can even take part of your pension as a tax free lump sum when you retire.
2. You and your employer pay contributions towards the cost of your pension. So it’s a great way to save for your future and also pay a little less tax every month, as you’re taxed on your salary after you pension contribution has been taken.
3. Your pension benefits are for you and your loved ones. It doesn’t belong to your employer and it doesn’t belong to the Government.
4. As long as you’re in eligible employment your pension stays with you, wherever you go throughout your teaching career.
5. You can check on what benefits you’re building up at any time with your online Benefit Statement.
6. The Teachers’ Pension Scheme is a Defined Benefit Scheme based on your annual pensionable earnings, re-valued each year, rather than a scheme reliant on how investments perform, so you can see what pension benefits you’ve built up and can work out how much pension you’ll receive at your chosen retirement date.