TPS - Transitional Protection Choices

[@LIZ-pp6jo]

TPA has the unique ability of making reasonably intelligent people feel stupid. Thank you for your informative videos. Thank goodness I stumbled on them. I feel better informed as a result of them.

[@mark7282]

These are brilliant videos David. You have such a clear style. Every teacher should be pointed towards them, well done indeed.

[@TheDuntman]

Another excellent and easy to understand explanation David. Thank you.

[@najmaashraff8970]

thanks David, this is the BEST explanation I have had. Teachers pension has totally baffled me however, I feel its making some sense now. Clearly I need to re-watch your vids to make a dicision. I've just turned 55 so really needs to get things sorted!!

[@dfountain]

Glad it was helpful!

[@hounddogjonny]

Very good to know that. Your videos are highly informative David

[@drjohnbhoy1299]

Top man Dave Detailed and informative as ever Sincere thanks J

[@paulweller5614]

These videos seem to be very helpful for all sorts of scenarios. But I am not sure if I am missing one or not (perhaps not so far) which addresses the situation of someone who has, for example, been first of all in the Final Salary Scheme, following which they started taking a pension based on that; but then they returned to teaching on a part-time basis, but in the Career Average Scheme; and is now in receipt of both the original and additional pension benefits added together, having already received lump sum payments under both schemes?

[@dfountain]

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!)

[@paulfarr7797]

Looking forward to seeing what info I get. Retiring next April. Thank you for the excellent videos.

[@dfountain]

I think you may be one of those who might actually get to know "before" you retire, so good luck with your plans!

[@petermorris3665]

Thanks and very timely! My wife's application for her pension was approved by Teachers Pensions today so I'm now interested to see what and when she will be offered these choices....

[@dfountain]

Priority is going to be given to those who have already retired and who are in receipt of their pensions. With a backlog of over 8 years to go through it may take some time to get to those who are retiring this year, but reports are that it will be completed in 2024.

[@benvickery]

I’m 53 and so have 7 years until I can retire. What you said at the end confirmed my fears that if you take the career average at 60, you’ll going to be hit with a big deduction. I’m sure I’ll be better off sticking with the final salary. I just can’t see how teachers are going to keep teaching full time past 60. Thanks

[@dfountain]

Yes, currently only around 2% of the teaching workforce are over 60 and I don't see this changing. Indeed, only just over 18% are over 50, so many are leaving the profession well before they reach the "normal" (old) pension age. Early retirement does involve taking a reduced pension but the reduction is not designed to be punitive but rather to pay in a "fair" manner relative to how much has been paid in. It does this based on average life expectancy and the total amount paid out. To see more on this take a look at this video: kzbin.info/www/bejne/f3u9gK2eoZh5fpo I've now been through hundreds of statements of teachers comparing the final salary to career average options and, yes, I think it is highly likely that most of those who are looking to take retirement now or in the near future will be better off with the final salary option. However, as the years go by the bonus that is applied to the career average pension each year that they continue in the profession, along with the better accrual rate, will see a rise in those for whom the career average option could be better.

[@Jane51cat]

Brilliantly helpful video again. Thank you! 😊

[@andymannion410]

Much appreciated, David!

[@12newpark]

Thanks Dave - very clear video. Presumably these figures will not show if a hypothetical calculation, due to an earlier break in service, has been applied?

[@dfountain]

I was pleasantly surprised to see that the Government believe that hypothetical calculations will be included in the new style statements. This is what they say in their response: 56. Existing hypothetical calculations will not be impacted by the remedy due to the salary link that applies between the legacy and reformed schemes. Any hypothetical calculations will be displayed in the RSS. I would like to see it go a lot further and alert those who may be close to losing, or gaining, the benefit from a hypothetical calculation so that they can take action. If I were to put on my more cynical hat, I might think that the Government have overlooked the complexity of doing these for all the different break points that can exist in a teacher's employment history and may well backtrack on that when they come to start programming the computers to do it!

[@12newpark]

@@dfountain Thanks Dave - that is (unexpected) good news! Fingers crossed they deliver on their promise

[@dfountain]

@@12newpark Yes, it's one of those I'll believe it only when I see it!

[@PhilInce-o6e]

Great video again, many thanks. Would the statement figure take into account a break in service which allows the hypothetical calculation to kick in?

[@dfountain]

The Government's response tells us that the new statements (RSS) are going to include hypothetical calculations where applicable but this is something we have seen missed even when the actual pension calculations have been completed in the past so it is worth checking this for yourself to be sure.

[@martinherron3412]

Good vid. Assume also need to factor in that career avg is contracted in for state pension?

[@dfountain]

No. The contracting out aspect of the schemes was identical for both schemes in the period leading up to 2016 and at that point it was cancelled for both schemes (along with the whole contracting out idea). This means that your choice as to which scheme your remedy period gets counted in will have no impact on the state pension.

[@martinherron3412]

@@dfountain Thanks. I’d missed that contracting in was the same for both schemes after 2016. . Makes life easier. 👍 Wait to see what remedy/ options are for already paid AAB and faster accrual. Thanks again.

[@roblowry9457]

Another excellent video. I'm taking my TP in September. I wonder how they will offer me the choices post retirement - and how soon.

[@dfountain]

Yes, I've nothing new on the timescales yet, other than those in retirement will be prioritised and "sometime" in 2024. I would hope they can get it sorted before April so it is all done for you in the one financial year and saves messing around with income tax.

[@victoriabrinkley3512]

Thanks David, such helpful videos in what feels a bit like a minefield! I asked TPS to do the BuyOut option but was told I wasn’t eligible as I haven’t done BuyOut before, yet it doesn’t appear to say that anywhere on their website. The deadline is 2 weeks, should I give up? Thanks

[@dfountain]

If you have "transitional protection" you will need to complete the paper form and submit that before 31 March.

[@robtudor3785]

Once again another excellent video. Took my pension in April at 59. Interesting what my choices will be. I roughly calculated that I’d be better off taking 4 1/2 years that I was at sported member as 1/80 pension. Sound be almost the same yearly but the bonus of about £8000 lump sum. 🤞

[@dfountain]

Yes, most of the calculations put the pensions at roughly the same amount but the lump sum gets a big boost from this.

[@robtudor3785]

@@dfountain the fact I had to take 1/57 8 years early so nearly 32% reduction. This way it will only be 1 year in the 1/57. Looking forward to the Brucie Bonus.

[@leonardmemories7487]

Excellent update, as someone who has slready taken early retirement with only 3 years in the transition I presume it will be a fine decision.

[@notthefirstwontbethelast8239]

Thank you David, I have a question that TPS are not answering (they just keep repeating that I CAN get the figure at the point of retiring). If we do not get given the actual figures until we retire then how can we know when we CAN retire? If 50 , how do I know if I can retire or plan for retirement at 55-60 without been given those projections beforehand? Am I not understanding correctly?

[@dfountain]

Yes, it is frustrating, but so long as your employment data on your statement is correct then the pension figures on it will be in the right ball-park and will be the minimum you can get (any hypothetical calculations can only improve on those figures). To be fair this is also the case with most other types of scheme, even the "pots" of money DC schemes cannot tell you how much you will have until you come to use them as they are subject to market fluctuations. I do look over quite a few statements and generally the figures are close to what you will get - though I will also do the hypotheticals which the TPS refuse to do (something we have been told will be included in the, yet to be seen, "remediable service statements". (The only ones produced so far have been for those applying for their pensions after October 2023)

[@notthefirstwontbethelast8239]

Thank you. Statement at a glance looks ok. Any idea why some of the lines are highlighted blue? There’s nothing to explain that on the TPS statement.

[@dfountain]

@@notthefirstwontbethelast8239 the blue rows are summary rows for a series of months. Depending on when your school moved to monthly reporting you may find the blue row simply repeats the row under it. If you look at more recent entries you'll see more clearly what the intention of these are.

[@66squeaky]

Thanks David, what about those of us who have taken earlier retirement at 55?

[@dfountain]

You will have the same rights and will be contacted with the two options. One word of warning though is appropriate for anyone who had a break in service and whose pension is based on a hypothetical calculation...they should check very carefully to see if the options they are given include that calculation or not. For anyone who has been given the "restricted" hypothetical then it would not make much sense for them to move service that won't be counted in that calculation into the final salary scheme!

[@LIZ-pp6jo]

I retired at the age of 60 in 2019 in the belief I was in the protected group on final salary pension. I wasn’t contacted by TPA and I am affected (as described in your video). I stumbled across all of this by accident. I have been in touch with TPA and was told I will receive my options but they don’t know when. You say you don’t have to make a decision until you retire, I retired 5 years ago. Going forward, does this mean retired teachers who are affected will have all future pensionable years at career average, even if it means their pension will be lower ?

[@dfountain]

You must be contacted with the options by April 2025 (next year). One of those options will be identical to what you already have, and is likely to be the best option anyway. Retired teachers will get the the same two options if they were affected by the age discrimination. No-one in this situation will be forced to take one of the options. "Full protection" extended only to the age of 60 (or 65) where those ages were attained by 1 April 2022. At that point everyone was to be moved on to the career average scheme, if they were still working.

[@mangalsingh4036]

Hi David, Great video. Perhaps you could give me your thoughts on the following. I left teaching in 2019 and have deferred benefits of 28 years. Im looking to take my pension at 55. Withregards to the McCloud judgement i imagine it would be more advantageous to choose to have the affected period put into the final salary part. My reasoning is that the reduction is less for 60 final salary, rather than the CARE average which applies a larger reduction as my NRA is 67. Any thoughts would be appreciated. Mangsl

[@dfountain]

If you want to get a rough idea then you can use this sheet: docs.google.com/spreadsheets/d/1aKYA2cPirQjKje6KGU54jNo5R6o0dtyNp0wuGZn_pfU/edit?usp=sharing Use your 2022 statement and it will show you the difference between the two schemes. (Both options would have roughly the same amount of career average pension added to them since March 2022, so this is just about seeing roughly what the difference would be) Whilst the reductions are less for the NPA60 the base pension is also less since it is based on 1/80th rather than 1/57th, so don't be surprised if the annual pension figures come out to be quite similar. The primary difference is in the automatic lump sum.

[@nanobot5370]

Thank you- how does it work if you have already retired please?

[@dfountain]

Eventually, before April 2025, you will be contacted with the two options and asked to choose. If you were moved to the CA scheme before April 2022 then you currently have a time-limited opportunity to purchase additional pension in the final salary scheme.

[@nanobot5370]

@@dfountain Thank you so much, David. I really appreciate your clarity and prompt reply. Very reassuring. Kind regards, Linda

[@kim-bz4sd]

Hi David, I contacted TP today and they informed me that I need to make a decision regarding ‘Transitional Period Protection’ before April 2025. Have I been misinformed?

[@dfountain]

There are a number of deadlines in regard to this. However the only one that relates to next April that I am aware of is the deadline the TPS themselves have. They must deliver every teacher their RSS before then.

[@Sam-hx2zq]

Thanks Dave.

[@nota8386]

Thanks, i've been waiting for this.

[@splatten8597]

And if you had already retired?

[@dfountain]

You will have some of these options but some only apply to those still IN the scheme, such as the Faster Accrual or Buy Out. If you were moved to the career average scheme before April 2022 then you should be able to, retrospectively, purchase additional pension in the final salary scheme because you were denied that opportunity, illegally, by being moved to the career average scheme at that time.