วีดีโอ

www.teacherspensions.co.uk/-/media/documents/member/applications/miscellaneous/apb-january-2024-v18-fs.ashx

The spreadsheet won't need updating as it tells you how much of the annual allowance has been used. The videos have to be replaced rather than "updated" so it isn't a quick fix but I will think about that at some point, thank you.

Yes they should. In the 90s pension miss-selling was a problem and companies advising those with DB schemes to transfer to a DC scheme were put under greater regulation to ensure they made it clear what was involved in making such a transfer. At some point the scheme regulations also changed to prevent the transfer of a teacher's pension of more than 2 years being transferred to any DC scheme. I presume you have a pension account with the provider to whom you transferred the £11k and you may want to investigate with them if they broke the rules on this. However this is an aspect I am not well versed in and suggest you take properly qualified financial advice before doing anything as it is quite possible to shoot yourself in the foot is you get into unguarded conversations with them.

@@dfountain Thanks for taking the time to reply. I have lodged complaints with both companies and found some encouraging case studies from the Ombudsman so fingers crossed!

Yes, it should work. If you get stuck just give me a shout.

Sorry if this seems really obvious, if my wife chose Option 2, the lump sum is a negative figure. That seems like one to avoid, but out of interest would this actually be clawed back by TPS?

@@BobCurran-k5b Yes. If you pick an option where you would be paid less then they should reclaim that extra, but there is an exception for those who were moved part of the way through 2015 -2022 if BOTH options provide a lower amount. In that case they can waive the excess already paid. Whilst having a lower lump sum might dissuade you from Option 2 it is still worth considering if the annual pension is higher. Bear in mind that a pension from 2016 that is £1000 higher would now be worth an extra £1300 a year due to the indexation applied to the pension. Also, you should have the opportunity to convert some of the extra pension to a lump sum...so if you have a lump sum that is £6,000 less but a pension that would allow you to convert £1000 and still remain higher, then getting £12,000 for selling that £1000 would make it better value.

Thank you David. That’s very helpful.

@@dfountain My wife is also retired and just got her RSS. Option 2 shows that she needs to repay approx £7,000.00 from the lump sum. If she chooses Option 2 would the amount she'll have to pay back increase because interest would be added. Also would the Tax Office want her to pay additional tax as she shouldn't have had so much tax free? Great advice and help by the way. Many thanks.

Those who have retired are going to be sent the same choices document - the Remediable Service statement. Those who took decisions based on the position they were put in, illegally as it turns out, and who believe they would have taken a different course of action had they remained in the final salary scheme are permitted to make a "contingent decision" claim against the scheme. There are no details about how these claims are to be made or processed. There should also not be an expectation that a different course of action would have guaranteed a better outcome - some careful calculations are going to be required. For example, a teacher may have decided to take "early" retirement during the remedy period as they knew they would not be adding any more "years" of service to that pension. However they could now claim they would have retired a little later as they SHOULD have been able to add more years, up to 31 March 2022, to that pension. Trouble here is that waiting until later for many will also lead to a reduction in the value of their "final average salary" since salaries have been in decline against inflation since 2010.

Yes, this is a scenario that opens up something of a can of worms - particularly if the teacher made choices about leaving employment to take the final salary pension based on the way that they were going to be moved from one scheme to the other in the future. If they can show that they made choices based on the illegal way the changes were being introduced then they have made what is called a "contingent decision" and will have a claim against the scheme for this. (Nothing has been put in place yet to allow such claims to be processed but it is acknowledged within the legislation so it will be coming!) As it stands it depends on when they returned to the TPS having taken their pension. If they returned before 10 March 2012 then they have transitional protection and will have the mixture of FS and CA pensions. If they returned after that date then they will have returned without transitional protection and will be in the FS scheme until 31 March 2015 and the career average scheme from 1 April 2015 onwards. Where it gets very tricky is if they had tapered or protected age status and were in the FS scheme later than 1 April 2015. They will have choices over which scheme their 1 April 2015 service through to the date they left, or 31 March 2022 if that is earlier, gets counted in. Their service upon returning gets no such protection as they would be taken to be a "new" entrant to the profession and put into the career average scheme from the date they re-joined. This is the most likely scenario that might qualify for a "contingent decision" claim. For example, if a tapered member was going to be moved from final salary to career average on 1 April 2018 then they may have decided to leave the scheme on 1 April 2018 and take their final salary pension at that time as they would no longer be adding "years" to the final salary calculation. Turns out that they could have added another 4 years to their final salary pension and so they could make the claim. (Whether this would be to their benefit depends on so many factors of course as they would have to pay back the pension paid to them since they took it under such a claim!)

If you took ill-health retirement then it is likely that pension will be stopped because you are demonstrating you are capable of working in a school environment. If you took "normal age" retirement then working 3 days a week is very unlikely to see you exceed the annual limit as it is based on full time employment. Employment that is eligible to pay into the TPS would be taken into account in both instances. If you have not taken your pension then you should probably look at my video called "The Pay Plateau".

No, the amount of RAP is credited to your pension immediately you start the payment, so from November 2018. (2018/19 tax year) If you were to ask to purchase separate blocks in different years then you would have the impact spread across different years.

Perhaps I wasn't clear. I meant I wanted to buy the blocks in November 2015 but pay for it over a 3 year period from Nov 2015 to Nov 2018.

If the total amount of RAP is credited to one's pension immediately one starts the payment (irrespective of whether payment is to be spread over more than one tax year) then surely it follows that the Pension Input Amount will increase by the total amount of RAP (x16) for the same tax year to which the RAP is credited. If this is the case then wouldn't it also follow that the pension Annual Allowance for that same tax year be reduced by this same total? In other words one cannot benefit from tapping into the AA from the following tax year simply by paying in instalments over more than one tax year.

@@rascalhowe1858 The blocks get credited to your pension figure from day 1 of you starting the payments and as such use the annual allowance from that year (and the 3 previous years if you have unused allowance and need to use it). This does seem strange since you could, later, stop paying for the blocks and at that point the amount you get credited with changes to reflect the proportion of the total cost you have made.

@@rascalhowe1858 Correct. If you want to spread this across a number of years you need to apply to purchase blocks in different years. For example, instead of buying 4 blocks in 2018 with a payment plan of 4 years you could ask to buy one block in each of the four years from 2018 onwards.

Yes, that will work, the only trouble being that you need the co-operation of your employer to allow this to happen. With the opting out for a month your employer has no say in the matter, they have to follow your instructions.

@ great thanks for the heads up 🤞they will agree but I have a back up plan if not I really appreciate all the information you share on the videos

I don't believe so. You should have had more "years" credited in the NPA65 scheme than you had "earned" in your LGPS to compensate for the change in normal ages. If you had BEEN in the TPS prior to 2007 that is when the transfer in would have been into the old scheme.

@dfountain thanks for the reply David. Yes, my 18 yrs in the LGPS bought me 24 yrs in the TPS. This worked out quite nicely as at age 57 I have over 41 yrs in the TPS. Thanks again 👍🏻

I believe it is correct based on your NI records.

Unless you have had a break at some point then you have lost October and November 2014, but acting now will prevent the loss of any more of those remaining best 34 months.

Yes, a year working at £40k adds £700 to the ANNUAL pension. This means that each month is adding 1/12th of £700, so about £60. Work a month and the ANNUAL pension goes up £60.

@@dfountain Thanks. I see. My current Career Average Scheme (Apr22-Sep24) has a current value for an Annual Pension of around £1400 (payable from 67). Does that CA pension vanish if Entitlement Day opted for? or does it remain roughly as it is? or how should I factor that into the calculation? And does it make any difference if part time contract (0.66)?

Yes, pretty much all of the public sector was in the same situation.

Yes, when given options it needs to be clearer - being asked to "tick all that apply" and then being told later that "no, the top one covers all the rest so you shouldn't have ticked the rest as well" is fairly obtuse...and frankly, does it actually matter if you have said you want "All I am entitled to" and then ticked all of the individual boxes for the ones you ARE entitled to.

If you want to send me the forms I will take a look and see if I can figure out why there is such a difference. The FS is normally less, not more, because it is paid out for an extra 7 years or so. Dave@dfountain.co.uk

It is more likely to be getting WORSE. (Unless you are heading for a pay rise that exceeds inflation and can lift your current salary over that existing Method B (all the time noting that the Method B would be getting inflationary increases). I'm afraid you are looking back at a past "peak" that is disappearing in the mist. Take a look at these two videos where I examine the options for those working past 60: th-cam.com/video/omPUVMhyPBk/w-d-xo.html th-cam.com/video/laH9eWCbHcU/w-d-xo.html There is a good chance you are currently working "for free".

Thank you I will have a look

Yes, I do mention that for some taking the money earlier when they are more likely to be active and in need of it can be the choice they want to make. The alternative of taking a loan or keeping a mortgage going to pay for such and using the pension to service that loan isn't something many would be comfortable doing - and being able to decide what you want to do is key.

If you are over 60 then you can take it now without needing a break in employment (England and Wales). If you are under 60 then you could only take it by having a break in your contract and taking BOTH pensions as "early". If you are under 60 then taking a break will put in place a protective hypothetical calculation, but do check if you have any earlier breaks as one of those might be protecting something better aleady.

No, sorry, I misunderstood. You do not lose the opportunity to apply for more RAP having made the choice for this ROLLBACK. You only lose the opportunity if you are retiring and have made the choice for the pension being taken as part of the REMEDIABLE service statement's options.

It depends on how much AP you bought at the time and what it would be converted to. There is a limit on the total you can have, around £6,250 in 2015. I suspect that if you had converted the CA AP to £5,000 FS AP then you would only be able to purchase an amount to take you up to the limit, i.e. another £1250

That Method B is safe until November 2029, so there is no need to rush to do anything. Today we found that inflation is 1.7% for the period after April 2024 and so, by April 2025, her Method B will be revalued to £59,415.73 (we won't know what increase will apply AFTER April 2025 until next October) Her current salary, if she gets this year's 5.5% increase, will be in the region of £60,024 by next August. There is very little difference between these and as such I would suggest there is no need to look again at this until next summer when you will have a better idea of whether another above inflation pay rise is likely or not, and what the inflation is likely to be a few months later.

Thank you for such a speedy reply. We'll see what happens next year.

It will have locked in the salary at that time but may not get to use the full amount of years unless her salary rises above what it was at that time. This does not stop her using future salary increases in the calculation of this pension as her break was less than 5 years long. Breaks before April 2022 are a little more complex as there are two versions to the protective hypothetical calculation , a restricted and an unrestricted version. This "form" will lead you through making the assessment as to which one it might be: docs.google.com/forms/d/e/1FAIpQLSdHaC_gMuGlPivU7KRR2XaMwBS_Xy2oobOOCPn1cDZhN33LHg/viewform?usp=sf_link

No, the restriction will still apply and there is no way I can think of that could help other than to continue working for longer. The higher salary does get to be used in full with the Method B though, so it may be that your Method B will use the 3 years from 1 Sep 2022 to 31 Aug 2025.

@@dfountain Thanks for your reply David. I had a couple of breaks in service as well in the last 30 years, so I'm hoping a hypothetical will be equal to my current salary, though I won't know for sure until I get benefits. Thanks for these videos they are so useful.

This isn't something I am aware of, can you give me your source for this information please? As far as I understand it the part that has been contracted out from the State Pension and is now "in" the TP is not handled any differently from the rest of the TP.

Two years ago I queried the fact that I wasn’t getting the full cpi increase of 10.1%. The reply was that I was getting just 9% ish and the rest would be paid via the state pension- which it wasn’t as my state pension is frozen at the 2012 rate because I now live in Australia. I didn’t follow this up as though it seemed unfair the difference amounted to £25 per month. However this week, with no explanation from TP, an extra £1880 appeared in my account alongside the normal monthly pension. Also my projected pension for next month is £56 higher than usual. I receive my pension gross as I pay Australian tax on it so this isn’t a tax issue. I just wondered if another teacher living overseas had decided to query this practice of not giving us the full cpi increase but I can’t find any info on it despite searching all sorts of websites- and then I saw your youtubes!

Ok, yes, not sure about this though I did find this page which may be relevant: www.teacherspensions.co.uk/members/working-life/paying-in/tax-and-national-insurance/contracting-out-ni-and-gmp.aspx

@@dfountain Thank you. That lines up with the explanation I got in May 2023 about why I didn't get the full 10.1% straight into my TP, The message stated that the difference would be added to my state pension. As I said before, my state pension is frozen but I'm wondering if someone in the Treasury or the GMP unit have picked up on the anomaly for people in my situation and that this £1880 is back pay of the GMP element? Anyway, thanks for your help and speedy response. I'll let you know the outcome in case anyone else asks you the same question

Yes, this is a common misunderstanding, but you should be ok. The salary or reference comes in two parts. The salary (£35k) and the date it was last paid at that level (You don't tell me this but I guess it will be over 7 years ago). Each year, in April, these TWO parts are used to work out a "limit" for the financial year. If you add on inflation from the date the salary was changed, i.e. from the day after it was last paid at that level, I suspect you will get to the £45k figure you think it should be. The TPS have a calculator for this at www.teacherspensions.co.uk/members/calculators/how-much-can-you-earn-as-a-retired-member.aspx

A lot will depend on the exact dates you finished and re-joined...and you may need to have a "discussion" with the TPS as I have seen them apply a different interpretation to my own regarding what constitutes a "disqualifying break". A break of MORE THAN 5 years would mean you have no transitional protection and can not apply for RAP. If you left on 31 August 2013 and re-joined on 1 September 2018 then you have a break of EXACTLY 5 years (my interpretation) and as such I believe you should have transitional protection. An easy way to check if the TPS are applying this logic is to download the PDF version of your statement and check to see if your service up to 31 March 2022 is now being counted at Final Salary or Career Average.

Yes, that is correct. They pay less as each salary has its pension contribution calculated on the amount that employer pays them.

There are rules against using the tax free lump sum to re-invest in a pension scheme. The TPS warn about this but you would need to get professional advice on not breaking what are called the "recycling rules". There is therefore no official way of swapping the tax-free lump sum for more annual pension.

The substance of the letter will be the same for those who have already retired, though it may indicate which option was taken at the time. As your wife was 59 in 2023 it may be the case that the two options given won't quite match what she currently has. This is because, I suspect, she was a "tapered" member and was moved to the career average later than April 2015.

@@dfountain Thank you for your reply. Yes, she was 'tapered' and was moved in 2019 I believe.

Every 4 years the reduction factors are reassessed. In 2024 they moved in our favour. In the video I refer to age 50 having a factor of 0.811 in the NPA60 Final Salary scheme, this has now changed to 0.827. The spreadsheet I use has the most recent (2024) factors now: docs.google.com/spreadsheets/d/1MmQ1h1AwCoC5IggRdVai4L0aBu5j0subZHCkVe3JNOw/edit?usp=sharing Make a copy of that to put in your own.

I have not had anyone confirm to me yet that they have had an RSS having retired previously. The LAW says they MUST do it by April 2025, whether they will or not remains to be seen. I have no idea what the repercussions might be if they don't meet that deadline.

@@dfountainI retired August 2023 and haven’t had mine yet.

@@alysonmarlor4296 medically retired 3 years. Nothing yet and I could really do with the outcome