Teachers’ Pension Scheme. #teacherspensions #pensions #ukpensions #pensiontransfer #retiringabroad #IN
12 Wednesday Dec 2012
A summary of the reforms
The Teachers’ Pension Scheme is changing. This is necessary mainly because of increased life expectancy, meaning that people have longer in retirement.
The Teachers’ Pension Scheme will be reformed, with the new scheme in place from April 2015
Who it affects:
Those within 10 years of normal pension age (NPA) on 1 April 2012 will be protected from new scheme changes (other than changes to contribution increases).
- You will have an NPA of 65 if you joined the TPS since January 2007. If you joined before 1 January 2007 and have continued in pensionable service you will have an NPA of 60.
- People who are more than 10 years but less than 13.5 years away from NPA, will remain in the existing scheme for a limited period after 2015 before commencing in the new scheme.
- All others will automatically start the new scheme in 2015. This will give you a pension in two parts: one based on service to 2015 and one based on service in the new scheme from 2015.
- Your normal pension age will be linked to the ‘state pension age’. State pension age will increase to 66 by 2020, to 67 between 2026 and 2029 and to 68 between 2044 and 2046. You will still be able to retire earlier if you wish, although your pension will be reduced to take account of this.
- The new scheme is a ‘career average’ scheme which means that from 2015 your pension benefits will be based on an average of your pensionable earnings between 2015 and your retirement, not on your final salary at retirement. For each of these years, you will accumulate a pension based on 1/57th of your earnings. This is a better accrual rate than in the final salary scheme.