Glossary

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Abatement

This is when your pension payments are temporarily stopped if you return to teaching after retiring and your earnings are higher than your Salary of Reference (see reference below). This rule doesn’t affect the part of your pension that is based on your career average earnings.

Accrual rate

This is how quickly your pension grows based on your earnings. In the career average scheme, your pension increases each year by 1/57th of your pensionable earnings.

Active Teacher

An active teacher is someone who is currently working as a teacher and is paying contributions into the Teachers’ Pension Scheme.

Actuarial Reduction

This is a reduction in your pension amount if you choose to take it before your Normal Pension Age. The reduction is applied because your pension will be paid out for a longer period.

Additional Pension

This is an option offered by the Teachers’ Pension Scheme to increase your pension by buying extra amounts. You can buy additional pension in chunks of £250, either through regular monthly payments from your salary or a one-time lump sum.

Additional Service After Retirement (ASAR)

This is when a member returns to teaching after they’ve started receiving pension benefits from the Scheme. This is separate to Phased Retirement.

Additional Voluntary Contribution (AVC)

This is an extra payment you can make to boost your pension. The Department for Education has a scheme with Prudential, but you can choose other providers. The amount you get from these contributions depends on how much you pay in and how well the investments perform.

Age Retirement

This is when you retire and start receiving your pension at your Normal Pension Age. The Normal Pension Age varies depending on your service and which part of the scheme your benefits are in.

Annual Allowance

This is the maximum amount your pension can grow in a year without you having to pay extra tax. If your pension grows by more than this amount, you will have to pay a tax charge on the excess. As of April 2023, the Annual Allowance is £60,000.

Annuity values

If you return to teaching after retiring but don’t work long enough to qualify for a new pension (12 months), you will receive an annuity instead of a refund of your contributions. This annuity is based on the value of your contributions and is paid in addition to your main pension.

Auto Enrolment

This is a process where eligible employees are automatically enrolled into the Teachers’ Pension Scheme when they start their job. You can opt out if you wish, but every three years, your employer must re-enrol you if you are not an active member at that time as part of the Auto Enrolment legislation.

Average Salary

This is the salary used to calculate your final salary pension. It is the highest of either your last year’s salary or the best three consecutive years’ salary in the last ten years, adjusted for any changes in salary. If you worked part-time, your full-time equivalent salary is used, but your pensionable service is based on your part-time hours.

Average Salary Service

This is the pensionable service you have accumulated while being a member of the final salary scheme.

Award

This is the pension you receive when you retire.

Award papers

These are the documents you get when you start your retirement, detailing your calculated retirement benefits. They are usually available through My Pension Online.

Beneficiary

This is the person or persons who will receive benefits from the Teachers’ Pension Scheme if a member dies. It could be a spouse, child, or other designated individual.

Benefit Statement

This is an estimate of your current pension benefits. It is based on the information about your service and salary that your employer provides. It’s important to check this statement to make sure the details are correct. If you are actively contributing to the scheme, your statement is updated every month. If you are no longer contributing, it is updated once a year.

Best three in ten

This term is used to calculate your final salary pension. It refers to the average of your highest three consecutive years of salary within your last ten years of service. If your salary in the last twelve months before retirement is higher, that will be used instead.

Break in pensionable service

A period where according to our records you were not contributing to the Scheme.

Buy Out

In the career average scheme, your Normal Pension Age (NPA) is either your State Pension Age or 65, whichever is higher. Buy Out is where you pay to reduce the number of years between ages 65 and 68 (or less if your NPA is lower) that your pension is reduced for early payment.

Career average

This is the type of pension scheme all active members are part of. It is a defined benefit pension where each year, a portion of your pensionable earnings is added to your pension and increased annually.

Cash Equivalent Transfer Value (CETV)

This is a document that shows the value of your pension as a cash amount. It is used if you want to transfer your pension out of the Teachers’ Pension Scheme or during divorce proceedings.

Certificate of re-employment

This form must be filled out at the start of the scheme year by members who have retired and then returned to teaching. It helps assess if their pension should be reduced to avoid overpayments.

Child Pension

This is the pension paid to the child(ren) of a member who has died. To receive this pension, children must be under 17 or in full-time education and under 23.

Club Transfers

These are transfers of pension benefits between public sector pension schemes, such as those for teachers, local government, civil service, NHS, police, firefighters, army, and judiciary.

Commutation/Conversion

This allows you to exchange part of your pension for a tax-free lump sum. You can convert up to 25% of the value of your pension fund.

Concurrent Service

This occurs when you have more than one teaching contract with the same employer at the same time.

Consumer Price Index

This is the official measure of inflation in the UK. It reflects changes in the cost of living by tracking the prices of a basket of goods and services.

Contributions Monthly Breakdown

This is a form used by employers to detail the pension contributions they have made for their employees. It breaks down contributions by pay bands and any additional pension options.

CSV

This is a file format used to save data in a table structure, where each value is separated by a comma. It is often used for submitting data in templates.

Death in Service

This term refers to a member who dies while still actively working in a pensionable teaching job or within 12 months of leaving due to ill health.

Deferred Choice Underpin (DCU)

This is a government policy change for members affected by the Transitional Protection remedy. If eligible, you will choose between final salary and career average pension benefits for service between April 1, 2015, and March 31, 2022, when you retire. You will receive information to help you make an informed choice.

Deferred Member

This is a member who is no longer actively contributing to the Teachers’ Pension Scheme, either because they have left teaching or opted out of the scheme but are yet to start taking any retirement benefits.

Department for Education (DfE)

This government department is responsible for education and children’s services in England. It manages the Teachers’ Pension Scheme through the Secretary of State.

Department for Work and Pensions

This government department is responsible for welfare, pensions, and child maintenance policies in the UK.

Dependant's benefits

These are benefits paid to the dependents of a deceased member, such as a spouse, civil partner, qualifying partner, or children.

Disqualifying break

If you return to teaching after a break of no more than five years, you keep your salary link for final salary benefits or active status for career average benefits. A break longer than five years is considered a disqualifying break.

Early Career Teacher

This refers to teachers who started their induction on or after September 1, 2023. Their induction period lasts for two years, during which they receive support and training to help them develop their teaching skills.

Early Retirement

This is when you start receiving your pension before reaching your Normal Pension Age (NPA). You can take your pension from age 55, or earlier if you are too ill to work. However, if you take it early, the amount will be reduced because it will be paid out for a longer time.

Earmarking

Also known as pension attachment, this is a legal process where part or all of your pension benefits (excluding the state pension) are directed to your ex-spouse or ex-civil partner when they become payable. This usually happens as part of a divorce settlement.

Earmarking and Scheme Pays Debits

These are deductions made to your pension benefits due to specific legal or financial arrangements.

Earnings limit

This is the maximum amount you can earn each year from teaching after you retire before your pension payments are reduced. This limit is also called the ‘Salary of Reference’ and is listed on the documents you received when you retired. It applies to final salary pensions taken at or after the normal pension age, but all your teacher’s pensions, including career average pensions, are considered when checking if you have reached this limit.

Eligible child

For family benefits, this is a child, adopted child, or a child who was part of the member’s family and financially dependent on them before they died. The child must be under 17, or under 23 if they are in full-time education or training without any gap years.

Eligible Employer

An eligible employer is a Local Government Pension Scheme (LGPS) employer. If members have excess service in the remedy period due to Transitional Protection changes, they can transfer this service to the LGPS.

Eligible jobholder

Under Auto-Enrolment laws, employers must enrol eligible employees into a suitable pension scheme. The criteria for eligibility under auto-enrolment are different from those for joining the Teachers’ Pension Scheme.

Employer Portal

This is a secure online system used to exchange data about pension scheme members between Teachers’ Pensions and employers or payroll/HR providers.

Employer’s Contracting Out Number (ECON)

This number identifies employers and pension schemes for tax purposes when members were contracted out of the state pension scheme. The Teachers’ Pensions ECON is E3900002R, and the SCON (Scheme Contracting Out Number) is S2730011H.

Enhanced benefits

These are increased pension benefits for members who retire after their Normal Pension Age. The increase reflects the shorter period the benefits will be paid.

Enhanced pension

Members who retire due to ill health and receive a total incapacity pension will have their pension benefits increased to account for the time between their ill-health retirement and their Normal Pension Age.

Excess Service

This refers to having a full-time teaching contract plus additional part-time contract. The extra part-time contracts are considered excess service and are not pensionable in the final salary scheme.

Excluded Employment

This is employment that would be pensionable, but the member has opted out of the Teachers’ Pension Scheme or has not elected for part-time or post-retirement service to be pensionable.

Family benefits

These are benefits (pension or lump sums) paid to the spouse, nominated partner, or children of a deceased member. They include both short-term and long-term payments.

Faster accrual

This is an option for members to increase their pension by adding a larger fraction of their pensionable earnings. Each election lasts for one year (April to March) and must be made before the start of the scheme year.

Final salary Scheme

This scheme has two sections: the 80th section for those who joined before January 1, 2007, with a Normal Pension Age of 60, and the 60th section for those who joined on or after January 1, 2007, with a Normal Pension Age of 65. From April 1, 2015, new entrants join the career average scheme, and since April 1, 2022, all active members are in the career average scheme.

Financially Dependent

This is when someone is reliant on a Scheme member for financial support, such as money, clothes, or food. This could include children, spouses, nominated partners, or relatives.

Financially Interdependent

This refers to various situations, but one broad example is where two people, such as cohabiting partners, share financial responsibilities like household bills.

Flexibilities

These are options for members to increase their pension, including Additional Pension, Faster Accrual, and buying out the standard rate of actuarial reduction.

Guaranteed Minimum Pension (GMP)

This is the minimum pension a scheme must provide as a condition of being contracted out of the state additional pension scheme.

HM Revenue and Customs (HMRC)

This is the UK government department responsible for collecting taxes, paying some forms of state support, and administering other regulatory regimes.

HM Treasury (HMT)

This is the UK government department responsible for economic and financial matters, including public spending and economic policy.

Ill-health Retirement

This allows members who are too ill to continue teaching to access their pension benefits before the minimum pension age. The application must include medical evidence and is assessed by a board of medical advisors.

Immediate Choice

If you are already receiving your pension but have service during the remedy period (April 1, 2015, to March 31, 2022), you will need to choose between final salary or career average scheme benefits. You will make this choice when you retire.

In service

This means you are actively contributing to the Teachers’ Pension Scheme through your employment.

Index-linked

This means your pension is protected against inflation, so it may increase but will not decrease.

Indexed Amount

This is the value of a benefit or salary after it has been adjusted for inflation. In the career average scheme, benefits are revalued in line with the Consumer Price Index plus 1.6% for active members, or by the Pensions Increase (Review) Order for deferred members.

Irregular part-time

This refers to a part-time teacher who does not have fixed, regular hours each pay period or has a short-term fixed hours contract.

LA/Establishment Number

This is a unique identifier for each employer, such as 123/1234. It helps to distinguish one employer from another.

Legislative changes

These are changes required by the government to fix age discrimination issues in the pension scheme. The Public Service Pensions and Judicial Offices Act outlines how the government will address the discrimination identified by the courts regarding the 2015 pension reforms.

Lifetime allowance (LTA)

This is the maximum amount of pension benefits you can receive without facing extra tax charges. If your pension benefits exceed this limit when they start being paid, you will have to pay a tax charge on the excess amount.

Local Government Association (LGA)

This is an organisation that represents local councils. It works to ensure that local government has a strong voice in national government decisions.

Long-Term Pension

This is the ongoing pension paid to the spouse, civil partner, or children of a deceased member. If the member was actively contributing to the scheme at the time of their death, the long-term pension starts after the short-term pension ends.

Lump sum

This is one off amount of money, usually tax-free, that you can receive from the Scheme once you start claiming your pension. If you were a member of the Scheme before January 1, 2007, you will receive a pension and a sum that is three times the amount of your annual pension. If you have service after December 31, 2006, you can choose to convert some of your pension into a larger lump sum, a process known as commutation. If you joined the scheme on or after January 1, 2007, you will receive a pension only, but you can exchange part of it for a lump sum.

Mandatory compensation

This is an increase in a member’s pension when they are offered Premature Retirement. It includes both the annual pension and any lump sum that may be applicable.

Maternity leave

This is the period of leave a mother can take when a child is born or adopted. During this time, both the member and employer continue to pay contributions into the pension scheme, and the service is considered continuous. If the member stops receiving pay, no contributions are made, and that period is not counted towards the pension.

McCloud Judgement

This court ruling found that the 2015 pension reforms were unfair to some members based on their age. As a result, changes need to be made to all public service pension schemes, including the Teachers’ Pension Scheme, to remove this discrimination.

Mixed Service

This refers to having service in the scheme before January 1, 2007, and then taking a break of more than five years before returning. It means you have a Normal Pension Age of 60 for service before January 1, 2007, and 65 for service after this date.

Money and Pensions Service

This organisation provides free and impartial advice on debt, money, and pensions. It combines the services of the Money Advice Service, the Pensions Advisory Service, and Pension Wise.

Monthly Contributions Reconciliation (MCR)

This is a service for employers to reconcile the service, salary, and contributions they have paid for their employees.

Monthly Data Collection

This allows employers to submit service and salary information for their employees monthly, rather than through an annual return.

Multiple Employment

This occurs when a member has part-time pensionable jobs with more than one employer at the same time. In the career average scheme, these jobs can add up to more than a full-time position.

My Pension Online

This is a secure online portal for members to access their pension information. It allows you to view your Benefit Statement, update your details, and access various forms and resources.

Nomination

This is when a member designates one or more people to receive a death grant if they die. If the member is married or in a civil partnership, the death grant is automatically paid to the spouse or partner unless a different nomination is in place.

Normal Pension Age (NPA)

This is the age at which you can start receiving your pension benefits without any reduction.

Opting in

This is when a member who has previously opted out of the scheme decides to rejoin. They can do this by completing an online form, and contributions will start from the first day of the month after the form is received.

Opting out

This allows a member to stop paying contributions to the Teachers’ Pension Scheme. Employer contributions will also stop, and any pension already built up will be deferred until the member either opts back in or takes their benefits.

Overtime

In the career average scheme, overtime pay is considered pensionable earnings and counts towards your pension.

Part Time

This refers to members who do not work full-time. Their employment can be regular or irregular part-time, depending on their contract.

Past Added Years

This was an option to increase your pension by adding to your pensionable service. It is no longer available and has been replaced by Additional Pension since January 1, 2007. Existing agreements can continue until the end of the contribution period.

Paternity leave

This is the period of leave a parent can take when their partner is having a baby, adopting a baby/child or having a baby through a surrogacy arrangement. During this time, both the member and employer continue to pay contributions into the pension scheme, and the service is considered continuous. If the member stops receiving pay, no contributions are made, and that period is not counted towards the pension.

Payable Date

This is the date when the first pension payment is made. It can vary depending on the member’s service and circumstances.

Pension Credit Member

This is someone who has been granted a portion of another member’s pension through a Pension Sharing Order, often due to divorce. They may also be a member of the scheme in their own right.

Pension Debit Member

This is a member who has given a portion of their pension to someone else through a Pension Sharing Order, often due to divorce.

Pension scheme registry number

This is a number assigned to a workplace pension scheme by the Pension Regulator to show compliance. The Teachers’ Pension Scheme registry numbers are 10005209 for the 2010 scheme and earlier, and 10276733 for the 2015 scheme.

Pension Transfers

This allows members who change jobs or professions to transfer their pension benefits into or out of the Teachers’ Pension Scheme within a certain time frame.

Pensionable Employment

This is any period of full or part-time work between the ages of 18 and 75 where you earn at least half your salary and pay pension contributions. It includes periods of sickness absence and family leave.

Pensionable Salary

This is the salary on which you pay pension contributions.

Pensionable Service

This is the period during which you are actively contributing to the pension scheme.

Pensioner

A pensioner in the Teachers' Pension Scheme is one who is in receipt of their pension directly from the Scheme. Also known as a retired member. 

Phased Retirement

This allows you to start receiving some of your pension benefits from minimum pension age while continuing to work part-time. You can take up to 75% of your total benefits and still work.

Premature Retirement

This is where a member is made redundant from minimum pension age but before reaching their Normal Pension Age. They can take their pension without any reduction if the employer agrees to cover the difference. This option is at the employer’s discretion.

Preserved Benefits

These are the pension benefits you will receive when you reach your Normal Pension Age if you have left the scheme and not transferred your pension to another scheme.

Protected Member

This is a member who joined the final salary scheme and was within 10 years of their Normal Pension Age on April 1, 2012. They stayed in the final salary scheme until they retired.

Prudential

This company manages the Teachers’ Additional Voluntary Contributions scheme, allowing members to make extra contributions to boost their pension.

Qualifying service

This is the period of active membership needed to qualify for pension benefits. The qualifying period is two years, or one year for additional service after retirement, and includes service in both the final salary and career average schemes.

Re-employment

This refers to taking up teaching employment after you have fully accessed your pension benefits, not including phased retirement.

Re-payment of contributions

If you do not have enough qualifying service, you can get a refund of your contributions. To do this, you must either opt out if you are still in an eligible role or be in a role that is not eligible. These repayments are subject to tax.

Reckonable Service

This is any service that counts towards benefits in the final salary scheme. It includes service from pensionable employment, additional service purchased, and service transferred from another pension scheme.

Remedy Period

This is the period from 1 April 2015 to 31 March 2022, for those affected by the Transitional Protection changes.

Residential emoluments

If a teacher is provided with accommodation and related services as part of their job, the value of this can be included in their pensionable earnings.

Restricted salaries

If a teacher’s salary increases by more than 10% or a fixed amount, the increase used to calculate the final average salary is limited to the higher of these two amounts.

Roll back

All of the pensionable service accrued in the career average scheme during the remedy period (1 April 2015 - 31 March 2022) will be moved to the final salary scheme when legislation takes effect on 1 October 2023. This is referred to as 'roll back'.

Salary link

Members who moved from the final salary scheme to the career average scheme on or after April 1, 2015, have salary link protection. This means their salary in the career average scheme is used to calculate the final average salary for their final salary scheme benefits.

Salary sacrifice

In the Teachers’ Pension Scheme, the only salary sacrifices arrangements that are pensionable are for childcare vouchers and mobile phones.

Scheme Contracted Out Number (SCON)

This is the number used to identify the Teachers’ Pension Scheme for tax purposes. The SCON for Teachers’ Pensions is S2730011H.

Scheme Pays

This is an option where you can ask Teachers’ Pensions to pay a tax charge on your behalf, and the amount is then deducted from your pension benefits.

Scheme Valuation

Every four years, the Government Actuary’s Department (GAD) evaluates the costs of all unfunded public service pension schemes, including Teachers’ Pensions. This process measures and manages the scheme’s costs and determines future employer contribution rates.

Secure Transfer Utility (STU)

This was the previous name for the Employer Portal, a system for securely exchanging data about pension scheme members.

Serious Ill-Heath

This refers to a condition where a member has a life expectancy of less than 12 months.

Service History

This is a record of your employment details, such as the dates you worked and your salary, provided to us by your employer. This information is submitted either monthly or annually and is used to calculate your pension benefits.

Short Service Serious ill-health grant

If a member with more than 12 months of qualifying service leaves their job due to serious ill-health but has not qualified for pension benefits, they are entitled to a grant. This grant is based on the higher of 1/6th of their annual pensionable earnings or their contributions.

Short-term pension

This is the pension paid for three months following the death of an active member. It is equivalent to the full-time rate of pensionable earnings the member would have received during this period.

Specialist

When applying for an Ill-health Retirement, you will be asked for evidence to help support your application. We refer in our guidance to that evidence being provided by a 'specialist'. A specialist is a relevant medical consultant who is involved in your care in relation to the issue which prevents you from working and will be providing information on your Ill-health application. We would ask that a medical report is provided from that specialist to explain your condition to us. If there is no specialised medical consultant involved in your care, or they are unable to provide a report, then we would ask for a report / information from a relevant treating clinical practitioner which may include, but isn’t limited to: Specialist occupational therapist, Hospital nurse practitioner, Counselling psychologist or consultant.

State Earnings Related Pension Scheme (SERPS)

This was an additional state pension scheme that ran from April 6, 1978, to April 5, 2002, when it was replaced by the State Second Pension (S2P).

State Pension

This is a regular payment from the government (separate to your teacher’s pension) that you can claim when you reach your State Pension Age. It is based on your National Insurance contributions and provides a basic level of income in retirement.

State Pension age

This is the age at which you are eligible to receive your State Pension.

Supplementary death grant

If a member dies within five years of starting their pension, a supplementary death grant is paid to their beneficiary. This grant is calculated as five times the member’s annual pension minus the amount already received.

Survivor (s)

These are the eligible beneficiaries following a member’s death.

Survivor's benefits

These are the benefits available to eligible beneficiaries when a member dies.

Tapered Member

This is a member who joined before 1 April 2015, and was between 10 and 13.5 years away from their Normal Pension Age on 1 April 2012. They moved to the career average scheme after 1 April 2015, following a period of tapered protection.

The Regulations

These are the rules that govern the provision of pension benefits to members of the Teachers’ Pension Scheme. The current regulations are the Teachers’ Pensions Regulations 2010 (Statutory Instrument 2010 No.990) and the Teachers’ Pensions Regulations 2014 (Statutory Instrument 2014 No.512).

Total Incapacity Benefits

These are benefits awarded to a member who has successfully applied for Ill-health Retirement and is deemed unable to work in any teaching role or other gainful employment.

TPS Pension Board

This board was established to ensure the Teachers’ Pension Scheme is efficiently and effectively administered. It provides confidence to members, taxpayers, and others that the scheme meets their needs.

Transfer of Undertakings

This refers to the process (often referred to as TUPE) where a person’s employer changes due to the transfer of staff under specific legislation.

Transition Member

This was a member who was in the 80th or 60th sections of the final salary schemes and moved to the career average scheme on or after 1 April 2015.

Transitional Protection

This allowed members who were within 10 years of their normal retirement age to stay in their final salary schemes, while other members moved to the career average schemes in or after 2015.

Treasury Order

This is an order made by HM Treasury and laid in Parliament. It is used to revalue career average pensions and is expected to match the Consumer Price Index rate from the previous September.

Unprotected Member

This was a member who was in the 80th or 60th sections of the final salary scheme and moved to the career average scheme on or after 1 April 2015.