Teachers who started work before 2015 will have been in a Final Salary Pension Scheme so these teachers do get a Final Salary Pension. A Final Salary Pension pays a higher level of benefits than the newer career-average deal.
To be eligible to receive a pension from the Teachers’ Pension Scheme you must have completed a certain minimum length of service. This is:
How much you receive in your pension depends on which of the teachers’ pensions you joined and your Normal Pension Age (NPA). The date you joined will either put you in the final salary arrangement or the career average arrangement.
Teachers’ pensions can be confusing to a lot of people, and they are the source of much debate. If you’re a teacher working in a state-funded school in the UK, you will automatically be enrolled in the Teachers’ Pension Scheme (TPS). The amount you pay and the amount you’ll receive when you retire depends on which of the teachers’ pension schemes you have joined.
Those of you in the career average arrangement with a Normal Pension Age (NPA) ranging between 65 and 68 will have an accrual rate of 1/57th of your pensionable salary for each tax year (April to March) you contribute to the Teachers’ Pension Scheme, plus a variable amount (Consumer Prices Index plus 1.6 per cent) dictated by HM Treasury.
The Government ‘Proposed Final Agreement’ on pensions contained provisions for transitional protection. Whether you have protection depends on your age on 1 April 2012 and your TPS Normal Pension Age (NPA) (the age at which you can get your teachers’ pension in full).
If you were within ten years of your NPA on 1 April 2012 (i.e., 50 or over if your TPS pension age is 60 or 55 or over if it is 65) then you will stay in the final salary scheme provided that you don’t have a break from the teaching of five years or more. This applies even if you work past the scheme retirement age.
You can opt-out of making pension contributions by logging into your account and filling in an online form. You’ll be entitled to claim back payments as long as forms are completed by you and your employer within three months of enrolment.
This article looked at an introduction to "Do teachers get a Final Salary Pension" but there is a great deal more to consider than is covered in this article. Defined Benefit Teachers’ Pensions are state-funded and as of the time of writing this article, cannot be transferred out to a private pension pot.
Private school teachers are being transitioned to defined contribution pension arrangements. Defined contribution pensions are a fixed amount of money and can be transferred to other defined contribution arrangements.
Would you like to get some professional advice to gain increased financial peace of mind and family security? If the answer is yes, the next step is to have an informal exploratory chat with a qualified financial adviser to see if it is worthwhile proceeding to the formal process known as regulated financial advice.