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Pension bulletin
This page list the latest information and advice on current pension schemes.
Auto-enrolment
The government is introducing major new legislation on pensions which could affect teachers and support staff, depending on their pension status. From October 2012, every employer in the UK will be required to automatically enrol all employees into a qualifying pension scheme.
The changes are being phased in starting with the largest employers first. Employees will still have the right to opt out, but will have to elect to do so.
Members who have opted out of the TPS, or have never been a member of the TPS, will automatically be enrolled into the TPS by their employer at some point between 1 October 2012 and 1 February 2014. Iif you wish to continue to opt out of the TPS you will have to re-submit your opt-out form, within a month of being entered into the TPS.
Members with multiple contracts of employment should note that they will have to opt out of each contract, and that it will be possible for them to opt in to the TPS under one contract and opt out under a second contract. Finally, please note that automatic re-enrolment will take place every three years. Therefore, members who wish to remain 'opted out' will have to re-submit an opt-out form every three years.
ATL has produced a factsheet to help members understand the new system.
Annual allowance
The Finance Act 2011 reduced the amount of tax-free growth that a member's pension may enjoy in any one tax year. The allowance for growth and input in one year (including employer contributions) is now £50,000. Currently we anticipate that those affected will be mostly high-earners (approximately £80,000+), although you may be caught if you earn less than that, but enjoy a high salary increase in one year. There is a calculator and further information on the Teachers' Pensions website. If you think you will be affected then you should contact an independent financial or tax adviser
National Insurance increase
From 5 April 2012 the amount of National Insurance contributions you pay will go up. This is because the rebate (or repayment) received by employees in an occupational pension scheme (like the Teachers' Pension Scheme) is being reduced from 1.6% to 1.4%.
This will mean that you will pay an additional 0.2% in National Insurance contributions from April.
The annual change for members (England & Wales and Inner London) is:
| Salary | NI now | NI 2012 | Difference |
|---|---|---|---|
| £21,588 (M1) | £1,498.85 | £1,527.67 | £28.82 |
| £27,000 (M1) | £2,061.70 | £2,101.34 | £29.64 |
| £31,552 (M6) | £2,535.10 | £2,583.86 | £48.70 |
| £32,000 (M6) | £3,037.94 | £3,096.37 | £58.43 |
| £36,756 (U3) | £3,076.32 | £3,135.48 | £59.16 |
| £45,000 (U3) | £3,717.98 | £3,788.50 | £70.52 |
National Insurance is based on the gross salary unlike tax which is based on the salary after pension contributions have been deducted.
Increase in contributions to the Teachers' Pension Scheme
From April 2012 the contribution rates in the Teachers' Pension Scheme will be tiered and members' contribution rates will go up. To find out how much you will pay, see our page on the 2012/13 rates.
Pension payment increase 2012
Teachers' pensions in payment will increase from 9 April 2012 by 5.2%. Teachers who have retired since April 2011 will receive a proportion of the increase.