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Teachers Pensions |
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Changes to the Teachers' Pension Scheme
Part time teachers
Previously, part time teachers had to choose to opt in to the Teachers' Pension Schems (TPS). From 1st January 2007 all new entrants to teaching, whether part-time or full-time, will automatically become members of the TPS.
So all teachers appointed to a new contract after January 1st 2007 will automatically be included in the scheme.
Any teacher who has a change of contract will also be brought into the TPS.
Supply teachers and Sessional Tutors who were not in the scheme previously will be brought in and have contributions deducted from the first date they work after 1st January 2007.
Teachers who do not wish to be part of TPS must opt out and to have contributions refunded that opt out must be received by the ESC within 3 months of appointment.
Where a teacher has previously opted out this election will remain in place and deductions will not be taken.
Existing Members of the TPS
They have a Normal Pension Age (NPA) of 60.
Benefits will continue to accrue at a rate of 1/80th per year plus a lump sum of 3/80th per year.
They will now have the option to commute annual pension into an increased lump sum, up to a maximum of 25% of the fund value.
A member who has been out of service for more than five years 31st December 2006, but returns to service in 2007, will be treated as an existing member.
Contribution Rates
Employees' contribution rates will increase from 6% to 6.4% and employers' contribution rate will go from 13.5% to 14.1%.
Average Salary for Calculations of Benefits
This was calculated on the best 365 consecutive days in the last three years. From 1st January 2007 there is an alternative calculation - the average of the best three consecutive years in the last ten years. On retirement this figure will be re-valued in line with the Retail Price Index.
'Stepping Down' will not be possible from 1st January 2007.
Phased Retirement
Previously you had to take all of your pension or none of it.
From 1st January 2007 members over 55 will be able to draw some or all of their pension benefits while continuing to work as a teacher in a reduced capacity. They must take at a 25% reduction in salary. This is subject to the employer agreeing to the member's new working arrangements and certifying the reduction in salary.
Actuarially Reduced Benefits
These are unchanged.
Ill Health Benefits
There is now a two tier provision
Total Incapacity Benefit
This will be an enhanced benefit payable to a member who is considered incapable of any future 'gainful employment'.
Partial Incapacity Benefit
This is un-enhanced and is payable to a member who is considered incapable of undertaking any teaching duties.
Death and Surviving Partner Benefits
The death in service lump sum is now three times the new average salary. Members can nominate multiple beneficiaries in the event of death in srevice.
Surviving partner benefits will be available for service from1st January 2007 for both opposite and same sex couples who choose not to marry or civil register.
Existing members can purchase past service within six months of nomination.
Re-employment Following retirement
Members who are re-employed will now automatically be put the scheme and contributions deducted, unless the member opts out by completing the appropriate form.
Buying Additional Pension
From January 1st 2007 there is a facility for members or their employers to buy up to £5000 additional annual pension.
You can no longer buy past added years/current added years. Existing elections will be honoured.
NEW ENTRANTS TO TPS
From January 1st 2007 all new entrants will have a Normal Pension Age (NPA) of 65. Benefits will accrue at 1/60th per year. No automatic lump sum will be payable, although members will be able to commute annual pension into lump sum at a rate of £1 of pension for £12 of lump sum, up to a maximumof 25% of the fund value.
A member who re-enters pensionable service after 31st December 2007, following a break of more than five years, will be subject to the provisions applying to new entrants. Benefits they have already accrued will be payable at age 60.
A DVD outlining the new scheme has been sent to all schools.
If you need further details visit the TPS website www.teacherspensions.co.uk
Tony Mulgrew
22nd March 2007
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