Transferring previous scheme benefits into the TPS
There is a 12-month window following joining the TPS, in which to transfer benefits from previous schemes. Teachers Pensions has confirmed that after a member moves into the CARE scheme they get a further 12 months in which to make such a transfer. This is because the CARE is a new scheme. If the transfer is a “Club” transfer (from another public sector or related scheme) then the service would be added to the most recent final salary section the member was in. It is not possible to transfer in service from all schemes as there are criteria that must be met but, please, contact TP if you have service from elsewhere that you wish to consider transferring to the TPS, and you are within a year of joining CARE.
Pensions in payment from Teachers’ Pensions
Teachers’ Pensions (TP) when checking historic pensions increases (PI) have found that what they call “second bite PI” was undercalculated for some members. This is the measure that ensures pensions are fully index-linked when put into payment. Affected members have been written to and will have the money owing to them paid in the next payment period. You may already have received this payment and the letter.
The Government has recently announced that they are to bring forward the State Pension Age (SPA) rise that will see the SPA rise from 67 to 68.
It has already been planned that between October 2018 and October 2020, both men and women's state pension age will increase to 66, and to 67 between 2026 and 2028.
Between 2037 and 2039, it will rise again to 68 for both men and women born between 6 April 1970 and 5 April 1978. The increase to age 68 was due to happen from 2044; however, this has been brought forward following a recent review conducted by ex-Confederation of British Industry boss John Cridland. Those born after 5 April 1978 already have an SPA age of 68. There would be a phasing in of this change over the two years between 2037 and 2039. Further updates will be placed here.
This decision would impact members born between 6 April 1970 and 5 April 1978 who have pension benefits in the Teachers’ Pension Scheme (TPS) CARE section, as their TPS retirement age is linked to their SPA. Members born between these dates, with CARE benefits, would have a TPS retirement age of 68 rather than 67. People born after 5 April 1978 already have a state retirement age of 68.
Previous benefits in the final salary sections remain payable at their respective normal pension ages.
ATL is firmly against this automatic link between SPA and your TPS retirement age and we continue to make representations to the DfE and Government to break this link.
Teachers' Pension Increase April 2017
In respect of retired teachers receiving their Teachers' Pensions Scheme benefits, the government is expected to confirm a 1% increase to pensions in payment from April 2017. Teachers' pensions are increased each April based on the preceding September's Consumer Prices Index (CPI). The September 2016 CPI was one per cent.
P60s from the TPS
Pensioner members will be aware that from 2017, TP will no longer issue a paper version of the P60 unless you are a dependent member, i.e. spouse, civil or dependent partner, or child pensioner of the scheme. Communications from TP imply that the only way you can receive your P60 from next year is to access it via My Pension Online (MPO). This is not the case – if you telephone next year to request a hard copy they must send you it.
ATL has asked the DfE to reconsider the approach taken to pensioners in the TPS with regard to digital interaction and the communications that Teachers' Pensions sends to pensioner members on the DfE's behalf. Any change to current plans will be advertised in a future edition of Report and on ATL's website.
Annual Allowance and Lifetime Allowance – from April 2016
From 6 April, the Annual Allowance (AA) and Lifetime Allowance (LTA) were reduced again and consequently more pension scheme members may attract a tax charge on retirement. If you earn more than £100,000 per year and/or have long service in the scheme, or you have been made aware in the past that you might be affected by the AA, you should take further advice on your tax position. Your annual benefit statement from the TPS tells you how much of your LTA your current benefits in the Teachers' Pension Scheme currently represent, but all other pension benefits must be taken into account. ATL cannot directly give tax advice or personal financial advice.
ATL's chosen provider of professional financial advice, Lighthouse Financial Advice, can advise on this topic and can be contacted here.
Any adviser will need to see a statement of benefits so you should ensure you are registered with My Pension Online so you can access a benefit statement.
Teachers' Pensions also have a lot of information on the AA and LTA.
HMRC produces pension scheme newsletters on a regular basis and ATL wishes to draw your attention to Newsletters 73, from which the below extract is taken, and 74, 75 and 76, regarding allowances and protections. Members who are concerned about AA or LTA or who have been informed they are close to limits, may find these useful to read and share with their financial advisers. They can be found here.
Find out more about pensions taxation.
Retirement Planning Advice and Seminars
It has come to ATL's attention that a number of teachers are being contacted directly by firms offering retirement planning advice and seminars to individuals and in-school seminars, at not insignificant cost. Some of these are branded with similar colouring and style to Teachers' Pensions branding, suggesting that they are somehow linked to, or endorsed by, the Scheme or the DfE.
ATL would like to remind all members that the only retirement advice we recommend is directly from TP or ATL: ATL runs a number of retirement planning courses around the country through the academic year at very good value for money. Details of these courses can be found here.