Thank you for that comment. I always try to steer clear of giving 'advice' as such as that is a heavily regulated area but I can help anyone work out what the different options will give them in £ and pence...as always though this is heavily dependent on what may, or may not, happen in the future. The key point this video is trying to make is that you can tell what the downside is with a high level of certainty - the one month lost from the scheme, particularly in the career average variant, is a known amount - whereas the potential improvement in the final salary portion is entirely dependent on future pay and inflation. Looking back at my career I could see several points in time where I could tell with confidence that I wasn't going to get any more significant pay increases for a while and this advice then would have been useful ;)

Yes, that's likely to cover some of the better years, 2008 to 2018. You are also going to be eligible under the McCloud judgement to swap your service back from the current career average to the final salary scheme for the period 1 Apr 2015 to 31 Mar 2022, but this is going to be tricky to work out. When you do come to retire make sure you have examined all the potential options as your break lead to the restricted rather than unrestricted hypothetical calculation.

@@dfountain looks like I'm going to be watching your video on McCloud later! Thanks, you are doing a great job.

Do you have any breaks prior to 2022 already?

Taking a break before April 2022 does mean that you will need to keep an eye on whether you will get the 'restricted' hypothetical calculation rather than the better 'unrestricted' one. After April there is no difference between the two.

Thanks - I took the break in September as my pay dropped then.

If you have since gone back into the scheme then unless you finish on a higher salary (calculated from the last 12 months OR best 3-in-last-10-years) then the months since the break won't be counted in the final salary calculation that is done to that break. (They will be used in the normal end of employment calculation). If you have your statement from the month you took the break it will tell you what that salary figure is. In working out if you get the unrestricted calculation that salary is NOT increased by inflation from September...so if you intend working for a number of years yet then even below inflation pay rises can get your final salary above that figure. But it is worth making a note of what that number is so that you don't accidentally take on a post that might drop you below it. This is one where I think you would need to examine the figures carefully and see whether another break in April may still be of some benefit/insurance.

Thanks for commenting. Just be careful to work out when might be the best time...you can ADD service time right up to 31 March 2022 so I would suggest you need to work out what effect that increase in time together with the fall in final salary means for your pension. After March there isn't the same conundrum because no more time can be added. In the worst/best case I have seen I caught a colleague who had stepped down from a deputy head role just before they started to lose those higher salaries...in their case they were better off opting out for THREE YEARS, otherwise they'd have paid over £10,000 in pension contributions with the end result that their pension would have gone DOWN. The calculation isn't too hard but if you want a hand just give me a should via the website at dfountain.co.uk

@@dfountain thanks David.. I'll check your website out

Hi I would really appreciate it if you can tell me where on the TPA site you can find the wages adjusted for inflation figure? Thank you.

On your benefit statement (download the PDF), it has your last 10 years with the actual and revalued salaries. They start on page 3 and go on from there.

@@dfountain Thank you David

You do need to have someone who understands the scheme look at it very carefully as there are ALSO limits on how much your pay can increase in the final 3 years. With 34 years in you will have transitioned from the final salary scheme to the career average scheme at some point since 2015, probably in the 2020s, however this transition was illegal (see my explanation of the McCloud judgement). You will be able to choose whether your service from 2015 to March 2022 is in the final salary 80ths scheme or in the newer career average scheme. Your service from April 2022 WILL be in the newer career average scheme.

Certainly. Get in touch via my blog dfountain.co.uk

Inflation is actually irrelevant when it comes to timing the break. What is important is finding the peak (in REAL-TERMS) and making sure it doesn't become too old to be used. A quick check is to download the PDF version of your statement and check, on page 5, what period your "best" final average salary is coming from. If it starts in 2013 then you are at imminent risk of losing a peak as this year will, every month, will be disappearing from the calculation. Even if the £55k you are currently on is the actual highest you have been on it would still be WORSE than a 2013 salary of just £43,300. This is what I mean by a "real-terms" peak...inflation gets added to the 2013 salary and so would, in 2023, be worth more than your current £55k

As far as the calculation goes the timing doesn't matter so long as you don't stray into the month that moves the 10 year window beyond the start date. So, in your case you would need to get the opt out form accepted in December 2024 so that you are out of the scheme in January 2025. However, there is no need to be too pre-emptive, the deadline for you is over 2 years away and something may happen between now and then that removes the need to opt out at all. For example, a promotion that lifts your current pay over the 2015-2017 figure or a change of job that allows for a natural break from the scheme.

As you've got in touch via my blog I've been able to give you a much more precise answer than I will here. The KEY thing is to identify what period of time is being used, right now, as your best "final salary" period. This can be tricky because the Government often do not confirm what inflation figure is going to be applied to the Method B calculation until almost a full year later and this can lead to the statement being so far out of date that it can give a false impression. If your best final salary comes from Method A, then taking a break is likely to give you an improved calculation IF (BIG IF) your salary is rising by less than inflation (something that has happened in teaching for well over 10 years now). If your best comes from Method B then you need to check the years involved and you have until 10 years after the earliest of those to take a break...but beware...if your method B includes the most recent years, and by that I mean it includes those since last April, then the lack of an up to date inflationary increase could give a false picture and a more detailed look is required.

Absolutely. Unless she has had a previous break this would be the most sensible option - but even if she has had a previous break the loss to the CA pension from taking a month out now is quite minimal.

My advice would be to work out the exact figures with what you know. If your current best is method A then it is also likely that your method B will be your more recent years. Only if your method B involves years from the maximum of 10 years ago do you need to be particularly careful. Taking your method A as your best then any drop in the full-time-equivalent salary could be a problem, particularly after March 2022 - up until then the extra months you are adding to the service part of the equation can outweigh a small drop in the salary figure. With only 1 or 2 years to go you need to ask whether you believe your salary will climb by more than inflation. Personally I doubt that will happen to anyone who is already at the top of the pay scale. The latest guidance to the pay review body is to bump up the starting salary and to "flatten" the pay structure. Opting out of April 2022 means that your final salary in effect at that point creates a pension that grows with inflation from April 2022 no matter what happens to the salary. This is the essence of the pay plateau effect, by giving your pension at that point a growth based on inflation rather than you actual salary's growth you are giving it the opportunity to grow by more than you are actually going to be paid. The more years you have in the final salary scheme the more significant that can be. Set against that you can work out exact amount you are sacrificing from the career average scheme. For example, UPS3 is £41,604. Losing one month means your CA pension doesn't go up by around £61, if taken at 67...however as you may be going at 55 it would be reduced to 56% and therefore means you would reduce the CA pension by about £34...a year. Taking a 30 year career with that method A final salary of £41,604 you would have a pension, at 60, of £15,600, or if taken early at 55 £12,637 If your method B is 1% lower than that your pension would drop to £15,445 and at 55 to £12,510. That's a fall of £127. Just under £100 more than if you sacrificed a month from the CA pension. So for every 1% your method B is below your method A you would lose around £100 from the final salary.

I would suggest you get in touch so we can do the actual calculations together because a break in 2021 means that your hypothetical calculation comes in two versions, one of which gets to use ONLY the service up to September 2020 but the other can add in the service from September 2021 to March 2022 (under the McCloud remedy that is going to allow you to revert most of the career average service to the final salary scheme). You will get to have two sets of calculations for your final salary. The hypothetical that uses the 10 years from October 2010 to September 2020 and whatever turns out to be your last 10 years as well. TPS should do the calculations automatically but it's worth checking that they have when you get your paperwork. They will NOT include it on the annual benefit statement though, something that I think they could and should.

Have a go at this: docs.google.com/forms/d/e/1FAIpQLSdHaC_gMuGlPivU7KRR2XaMwBS_Xy2oobOOCPn1cDZhN33LHg/viewform?usp=sf_link

I'm sorry to say that I think you may be looking at the statement for the last financial year and not your most current one. If the method B started on 1/04/2012 then, as we are in September 2022, that date is ALREADY more than 10 years ago. Indeed, the maximum time you can go back to right now, if you are still teaching, is October 2012. I would say that it would be best not to guess. Get in touch with me via my blog at dfountain.co.uk and I can show you what effects staying in and opting out will have on your pension between now and January. Opting out is an online form that schools have to process with effect from the 1st day of the next month...so get it in this week and you will be out in October. Opting back in has the same time scale.

I'm afraid I don't know. This is published on the TPS website and as the Act referred to is not specifically about the TPS I suppose there might be equivalent names or interpretations of it in other public sector schemes: "Hypothetical calculations were introduced by the Pensions (Increase) Act 1971 to members who, after completing sufficient service to qualify for retirement benefits, had a break in pensionable service and then at a later date returned to pensionable employment."

Yes, but beware, the standard school contract is to start you on 1 September no matter what day the first "work" day is in the month. This follows the STPCD (school teachers pay and conditions document) that is compulsory for all maintained schools in England and Wales, where a teacher is employed for full "terms".

Hi Mark, sorry, I cannot comment on the CS pension as I don't know if the "hypothetical calculation" protection applies to other public sector schemes. I see no reason why it shouldn't but I have already been told that Scotland and Northern Ireland require an actual break in employment rather than just an opted out period so this is a question for the administrators of the CS scheme.

@@dfountain thanks for this, I'll certainly ask the administrators 👍

Yes, though they have done that for the most recent 3 years and you can see those if you download the PDF version of your statement. Otherwise these sheets can help you work out if any breaks you have ALREADY had from the scheme might be worth more than your current position. Breaks BEFORE 2007: docs.google.com/spreadsheets/d/1GpV3GRnT20FMog2jMMZIh1tYbO0hdmYdK6pU_NQAW94/edit?usp=sharing Breaks AFTER 2006: docs.google.com/spreadsheets/d/1GUB2WnLHm2LFmPPv6ihwMvL7VVtQLALd8Zcf58-GnZ0/edit?usp=sharing

There is no "choice" as such, it is whatever set of 1095 days produce the highest value. For many those best 3 years are right back now to 2014...and as it is measured day-by-day, the final salary could be in decline! If your current best says it used months from before May 2014 then it is already too LATE to save them. I did a shorter video on identifying if your final salary is at risk: kzfaq.info/get/bejne/mdCep7CLl8q7Yok.html

Ah, you are in a situation that warrants a much closer examination. As you are already over 60 your NPA60 pension will immediately go into "payment" when you next take a break from the scheme. Whether this is advantageous or not depends on stuff we don't yet know, inflation and pay rises. You say Method A is much higher than B...are you sure you have that the right way round? I would suggest you get in touch directly and I can take a look at the numbers with you. dave@dfountain.co.uk

Thank you so much, I will do! @@dfountain

Yes, you could hit that problem. The limit being, for 2023. the greater of 10% of the previous year or an added £7,120. In which case timing the opt out to get the best of the limitation could be important, possibly delaying it until the restriction is lifted after a few more months, or if you believe the restricted amount you have at any given time when inflation is added to it will outperform such a delay.

Thank you!@@dfountain

Oops just had a look at my summary of benefits and my final salary arrangement using method b states that my best average salary period was April 2013-april 2016. My salary is unlikely to rise now before retirement.. I presume it might be worth opting out for a month to freeze this best salary period?

I'm afraid your statement is out of date...as we are now in August your last 10 years can only go back to September 2013 and no longer use April 2013 to August 2013. You may want to contact me directly to take a look and check: dave@dfountain.co.uk

No, a break of 1 day is sufficient, it is just that you cannot get a break of less than a month without having a break in employment. Opting out of the pension scheme in England and Wales can only be done in whole months.

@@dfountain Ah, great thank you. Will the benefit statement illustrate the results of 'protecting' the salary? Best wishes.

I'd really need to see your full service history to do the maths but you would only need a break of a single month, you don't need to stay out of the scheme until September. I'd also say that it is very likely that your "Method B" is currently the best, and in this case it's worth checking what years are being used in it. Unless you've been moving up a pay range then it is likely that your best years are 2019-2022 as these DHT years will get the most benefit from this year's 10.1% inflation figure. If that is the case then you don't actually need a break at all until 2029, that is just before the 2019 salary becomes too old to be used. Taking a month out whilst you are still on your DHT's salary would mean sacrificing more from the CA pension than if you took a month out upon starting that new lower paid post.

You are fine. All months before 2023 get the same inflationary increase and this maintains the relative values and as such your older months, from earlier in 2014, cannot "overtake" September 2014 and later. This means you have plenty of time to take a break to protect Sep 14 onwards.

Thank you, that is reassuring. I will put in the one month break now to protect that period. Thanks for all your help.

Yes, they are correct. But do check your new contract doesn't start on 1 January. Most do even if your first day through the gates isn't until later.

1 day is sufficient but as you are over 60 if you started before 2007 then you can take your pension now, without leaving employment...simply opting out of the pension scheme will trigger your entitlement day - though you still have to apply for the pension

Yes, that break fully protects your final salary pension, just so long as you didn't have any previous breaks. If you had another break before 2022 then getting the best from that can depend on the salary you finish your career on before taking the pension.

Oh, she has my sympathy and probably a few apologies owed to her then, hopefully she is recovering well! The answer is that both are used in the calculation. For the "final salary" scheme any period where you work part-time the salary aspect is based on the full-time-equivalent salary. So, going part-time, of itself, has no adverse effect on the final salary pension. This is because a part-time teacher will have added less "years" to the calculation because they only get the fraction of a year that matches their part-time rate. For example a teacher on a 0.8 contract for 10 years will only have had 8 years credited to the final salary pension. For the "career average" scheme it is based on her actual earnings. Every month 1/57th of what she earned that month gets added to the CA pension. A full time teacher on £57,000 would add £1000 a year to their CA pension but a 0.5 contract would add £500.

As you have had breaks previously this isn't possible to answer without a proper look at your full service history. It may well be that the break in 2014 may already be superior to what you are currently using. If you want to get in touch my email is dave@dfountain.co.uk

Thank you!

To be sure I'd need to see your full service history but as you moved to the higher post in 2015 you wouldn't need a break to protect that until 2025...however, you should look at your statement (page 5 of the PDF version) and it will tell you what period is currently being used for your best final average salary and base your decision on the earliest date that method B starts from.

Hi Harry, did you ever bottom this out?, in a similar position but AAB since 2022,( having had earlier flexibilities refunded). However this refund has required a restarting of AAB. I’m not 100% sure but the previous 2 years AAB purchased will apply to those 2 years of contributions.. getting a complete answer from TP is not easy. Thanks

Hi, Just listened to another of your videos and found the answer! The clock does not stop with the ending of final salary scheme (March 2022 McLeod), when calculating best 3 consecutive years in last ten year period. So I’d better get my skates on and opt for a break in TP so as to protect a high point in salary 9 years ago. Thanks for educating us.

No. The transition from Final Salary to Career Average has never, and won't, create a "break". The final salary scheme has what is called the "final salary link" that means salaries from after the change to the career average scheme continue to be used in the calculation of the final salary pension. If you worked on to 2040 without any break then the final salary would be based on the salaries from 2030 to 2040. So, if your current best years being used are 2013-2016 you may want to consider "locking" them in by taking a break.

This page has links to both the opting out and in process. You complete the form directly with TPS but it is wise to alert your employer that you have done this so that they are prepared. www.teacherspensions.co.uk/members/resources/forms/joining-or-leaving-the-scheme.aspx

@@dfountain thank you so much for coming back to me so quickly. Best wishes and in appreciation

Yes, if your "best" are getting too old to be used, then the only way to protect them is to take a break.

Absolutely! For a break before 2007 a different method is used for the final salary. It is just the best 365 days from the last 3 years. This sheet should let you compare the value of your 2002 salaries to what is shown on your statemen: docs.google.com/spreadsheets/d/1WH7kyEgdZPQqQHc54lqnKhyN3tf8XLXIX1Uvgp_DJ-g/edit?usp=sharing

This video should really have explained this. The key to not losing value is to create a break before your best REVALUED salaries become too old to be used. Note that if you have had any previous breaks you should check those first as you may already have locked in a better set of years...but it does get complicated if those breaks are before April 2022. Check pages 4/5 on your statement, the months/years being used for your best Method B are on there. If they are from 2014 then you are at imminent risk of losing some of them.

Yes. This is something called the "final salary link". If you work through to 2050 then the salaries in the years 2040 to 2050 will be the ones used in the calculation of your final salary pension even though all of those years will be "in" the career average scheme. Taking a break from the scheme creates an extra calculation, so if you took a break in 2023, and carried on until 2050, you would get a calculation that used the salaries from 2013 to 2023 AS WELL AS the 2040-2050 ones. The final salary scheme is based on the expectation that salaries at the end of a career would be higher than those from the first years and so it would have been very unfair to have stopped the use of future salaries in the calculation of this pension because it would have limited those who had just started in the scheme to salaries from the early part of their careers.

@@dfountain Thank you for this excellent, detailed answer. Cheers.

As 2006 your service is in the Final Salary 80ths scheme with a retirement age of 60. Earliest access at 55. This is one of the schemes that has a protected age and so is, under the current legislation, not going to rise to 57 in 2028. Your pension will be protected by this break. It will always get to use the 10 year period from March 2012 to February 2022 no matter how far into the future it is before you take it. Even if you did return it would still get to use this time period. If you return within 5 years then it will ALSO (not instead) use the 10 years back from the next time you leave or finish in the scheme. When multiple calculations such as this are done then you always get the BEST result...the exact point of this video ;) Returning within 5 years means that you maintain the final salary link but this is only of any relevance if you were to then go on to a higher salary than the one you left on (after the one you left on is adjusted for inflation!). In terms of what you can do then bear in mind the 5 year clock. Returning to a TPS eligible post before 5 years and 1 day have passed resets that clock, so you could in 4-5 years time look to do a day's supply work directly with a school that allows you to be in the TPS (doing supply work through an agency isn't TPS-eligible). BEWARE!...if your school offers you a zero-hours supply contract taking it may prevent the 'break' from the TPS, in which case the 10 year clock will continue to advance and could knock out some of your higher salaries given time.

@@dfountain thank you so much. Just to check, as long as I don't earn more in the future it's not necessary for me to return to the TPS within the 5 year period. Thanks again.

Not sure what you mean. If you do not return within 5 years then the pension you have already built up will continue to grow with inflation.

@@dfountain thank you. Sorry for not making sense. I was trying to understand the benefit of returning to the pension within 5 years versus later other than the obvious money being paid in. Thanks again for your explanation, I’m so grateful.

Ah. Yes. There is one other, potentially quite significant advantage! If you have built up some in the career average scheme and leave then each year it increases with inflation. However, if you continued teaching then it also gets 1.6% uplift. It may not sound much but as it is compounded over the years it can make quite a difference. Now, the advantage of returning within 5 years is that your CA pension is revalued as though you never left. It gets the 1.6% uplift for each year - even those you were away from teaching. Example. Assume inflation at 2% a year £1000 in the scheme. TEACHER WHO HAS LEFT Year 0: £1000.00 Year 1: £1020.00 Year 2: £1040.40 Year 3: £1061.21 ... Year 10: £1218.99 TEACHER WHO RETURNS ONCE EVERY 5 YEARS Year 0: £1000.00 Year 1: £1036.00 Year 2: £1073.30 Year 3: £1111.93 ... Year 10: £1424.29 Taken to the extreme a teacher who returns for a single day in the scheme before more than 5 years have passed will, in 10 years, have a fairly substantial increase in their pension over one who just left and didn't do two days work at the right time!

If you are in England and Wales then there is the hypothetical calculation. The TPS have details on this here: www.teacherspensions.co.uk/-/media/documents/member/factsheets/applying-for-retirement/hypothetical-calculations-v1-april-2019.ashx The definition of "pensionable employment" is in the teacher regulations: www.legislation.gov.uk/uksi/2010/990/made/data.pdf Page 5 covers the opting out element: Election for employment not to be pensionable 9.-(1) A person may make an election under this regulation by giving written notice to the Secretary of State. (2) An election has effect from the first day of the month after the month in which the notice is given. (3) But if the notice is given before or within 3 months after the start of employment in a capacity mentioned in Schedule 2, the election has effect from the first day of that employment. (4) An election ceases to have effect from the date on which an election under regulation 10 (election for employment to be pensionable) has effect. If you are in Scotland, and NI I think, then the break has to be a full break in service. That is a period where you are not employed. Your advisor is mis-informed and is mixing up what is called the "disqualifying break" with this break in pensionable employment. A disqualifying break completely separates the pension before and after the break into two separate pensions. A break in pensionable employment on the other hand gives you the best of both. Your final salary pension is then based on the better of the calculations to the break and, after the break, to the date of your final exit.

If the 3 years were 2016 to 2019 then you have until 2026. If they were 2019 to 2022 then you have until 2029

Yes, that is correct. It creates an EXTRA calculation and not a replacement, so if you did go on to higher things in the future you would still get the benefit of them in this pension.

Thanks, David. Just remembered when looking at my statement that I had two breaks, one in 2005-2006 and then 6 weeks in 2007. Does it 'reset' each time you have a break, or should the best salary from 2003-2005 be used if this was higher (when I had highest TLR) as this is probably worth more when revalued than my 2014-2016 salary? Would the second 6 week break have reset the earlier better salary and put me back to square 1 or is there some other reason this doesn't count for the calculation?

@@user-un9hg6nn4y Each break is considered as a separate hypothetical calculation, so you will have those two plus any more you create ON TOP of the final calculation. Whichever produces the best pension is the one that will be used. This sheet will let you see what each of them would be worth in April 2023: docs.google.com/spreadsheets/d/1WH7kyEgdZPQqQHc54lqnKhyN3tf8XLXIX1Uvgp_DJ-g/edit?usp=sharing (Make a copy of the sheet to be able to enter your own numbers) Note that for breaks BEFORE 2007 your best final average salary is calculated differently. Those earlier years are simply the best single year (365 consecutive days) out of the last 3 years. However, you also need to be aware that, for breaks before April 2022, there are TWO versions. The "restricted" and the "unrestricted" version. To get the best of these you do need to finish your career on a HIGHER salary than it was back at the time of the break. For you, though, this is unlikely to be a problem since we are talking about 16+ years ago and pay rises, even the below inflation ones teachers have had, should have lifted your current salary well over what you were paid in the early 2000s.

Thank you so much, David, this is so helpful! Really appreciate you taking the time to give such specific responses

So, no chance to progress up the leadership spine and for that to outpace inflation? If you have only just become a HT then you may find that your current Method A is "restricted" - you will need to work out at what point that restriction may end and whether by then if your Method B might be better anyway...in other words try to find the "peak" - that is the point at which you should consider taking a month out, if you believe wage rises will be less than inflation, locking in a "peak" that can then benefit from inflation. Whilst you are opted out your employer does not contribute. You will get the 10-11% you would pay to the scheme paid out to you (minus income tax of course) as it would not be taken from your pay that month. To restart you tell your employer you want to go back in the following month - there is another form on the TPS website - and yes, your employer starts paying again. The only hiccup here is if you are in the Independent sector and your school has withdrawn from the TPS.

A lot of the more complicated calculations you can ignore as you won't have any service in the final salary schemes. This video is only relevant to such schemes...for you I suggest you take a look at this video: kzfaq.info/get/bejne/obCghpaduJnMYWQ.html The CA scheme is far (FAR) simpler and has a lot less tricky parts to it...though do be aware of the 5-year break rule as this can have a significant impact if you have built up a pension before taking such a break and then return for a longer period.

Firstly you need to get them to CORRECT your salary as recorded for the pension. A salary sacrifice should not be taken off your reported pensionable earnings for several sacrificial options, including the "cycle to work" scheme: www.teacherspensions.co.uk/employers/managing-members/contributions/types-of-contribution.aspx Then you need to check what your best 36 months are on your statement, if they include 2014 then a month out soon may be prudent. However, just because you are dropping to 0.8 does not take your "final average salary" down with it (unless you are also dropping a TLR or down a pay scale), because it is the full time EQUIVALENT salary that is used in this calculation and not what you are paid. Also note, that if you intend taking phased retirement you have to drop to 80% of the previous year's salary AT the time you take the phased pension. Dropping to 80% this September but not wanting to take phased retirement until the following year would therefore mean dropping to 0.64, or lower, in September 2025.

It is very likely to have done this BUT there is one potential CATCH to look out for. This video goes into the detail: kzfaq.info/get/bejne/qax3fcWe2bO1eIU.html For breaks before April 2022 there are two versions of the protective hypothetical calculation. Restricted or unrestricted. Restricted will only use your service up the date you left in 2016 whereas the unrestricted version gets to use all of your service up to April 2022, adding a potential extra 6 years - a stunning advantage since those 6 years can be on a much lower salary. To get the unrestricted version you need to finish your career on a higher salary, even by just 1p, than you had back at the time of the break. The 2016 "final average salary" therefore becomes the target to beat. It is calculated with inflation added only to 2016 and then never changes. (The pension it create gets the inflation from 2016 hence the reason it can beat a later, higher, salary).

@@dfountain thanks so much for such a speedy and helpful reply. I now feel I am getting to heart of the issue, with all its complexities. It doesn’t help that ‘Teachers’ Pensions will apply hypothetical calculations at the point retirement benefits are taken’. I assume this also implies that the current benefit statement completely overlooks these breaks and could therefore be way off from what could actually happen once these calculations are applied? It feels like fishing around in the dark for answers. Once I really understand the questions I think the next step is a detailed discussion with TP about actual average recorded salaries and then establishing whether it would be wise to take another break. Just to clarify… would the 2016 ‘final average salary’ probably be the best three in ten at the time of break in service, rather than the ‘revalued’ salary shown on my statement today? Sorry for all the questions. Many thanks again!

@dtravels TPS are very reluctant to do the calculation - I must see if I can knock up a spreadsheet that will allow you to to get a rough idea of the values at the time. The Government did say, in response to the consultation, that the new RSS (not the current "rollback" but the new "remediable service statements") would include hypothetical calculations - but I will only believe that when I see it. The problem with comparing the 2016 salary to your current best 3, which most likely come from 2014-2017, is that the latter have a lot of inflation added to them. To get a rough idea of what your "target" from 2016 will be just look at what you were actually earning back in 2016. The final average salary will be a bit higher than that figure. As your current best though still includes nearly 3 years from that period it will easily exceeds it, the problem is that as you move forward and those 2014 to 16 years get to old to be used your final average salary will fall....so what you want to do is compare your target to the years that will still be inside the 10 year window on the date you intend leaving...so if you are going to teach until 2030 then look at the revalued 2020-2024 years. Those will grow with inflation so do stand a good chance of overtaking the target.

Thank-you once again: it's confusing, but slowly makes really good sense the more times I read it, thanks to your detailed answer. To make this even more nuanced (and risk overstaying my welcome in these comments 🙂)... 1. I can see that my 2016-17 break in service also included a reduced salary (0.8pte) in the final four months before the break, but hopefully this will not matter as it's the best three in ten at that time? 2. I also had another break in service a month or two later in late 2017; I assume this would just make the first break the less favourable evaluation point (based on 3 in 10) and therefore the first break would simply be ignored in the final calculation of pension benefits? Many thanks again! @@dfountain

@@ahowardtravels Part time employment doesn't affect the "final average salary" because this calculation uses the full time salary figure - just make sure that the "annual salary" amount IS the full-time-equivalent amount! Where you have two breaks you get two hypothetical calculations, whichever produces the best pension is the one that will be used.

If your best years are 2014-17 then last years "reasonable" pay rise was 6.5%. 2014-17 is going to get the benefit this year of inflation increases of 6.7%. As such 2014-17 is going to pull further ahead of your current salary. Note that your current salary is not going to get the full benefit of the 6.5% increase until it has been paid for 12 months, that is by 31 August 2024. Method B will get the full 6.7% increase with effect virtually 5 months earlier as on 8 April 2024.

Thank you for your reply. So I need to take a break in paying my pension before I “lose” 2014? Does this mean I need to do it before April, when it is revalued?@@dfountain

The rules of the scheme are clear, the employer MUST enrol you from the 1st day of the next month after receiving your instructions to do so. Keep a paper trail by completing the form on the TPS website and emailing your employer telling them of your intention. Schools are allowed to retrospectively correct and take deductions for the pension so there should be no problem. Don't let them fob you off if they do make a mistake and try to delay reinstatement.

Thanks David

One more question. As we’ve just had a payrise, should I wait until next September before taking a break. I’m just wondering whether splitting this year’s salary might be a mistake. When a break is put in, can the pension calculation be based on just the one final year before the break or would it be the best 3 of the last 10 before the break?

It is based on the better of either the Method A or B. However, the pay rise is NOT going to overtake Method B...the pay rise was 6.5%, and it doesn't get that in full until it's been paid for a full year, that being to the end of August 2024, whereas the Method B is going to get the inflation increase of 6.7% 5 months earlier than that in April 2024.

Thank you@@dfountain. I've taken the one month break as I am about to lose my best 3 in the last 10. I wish I'd known about this a few years ago because I think it would have been even more beneficial then. I've taken out life insurance to cover the death grant and will stop paying it once I rejoin the scheme. I may lose £70 per year in my pension if teachers pay improves over the next 6.5 years. However, that doesn't seem like something I'd be unhappy about as it will mean teachers pay has increased and my pension will be better than currently forecast anyway. So thank you again for this advice. I'm looking forward to seeing the inflation being added to my method B in February - April and seeing how much better it's looking then.

My blog is dfountain.co.uk and contact details are there. Firstly there is no need to worry about the effect on your pension any more. The break you have will protect your pension completely and so you can opt back in and add to your pension quite safely. The only thing that will worry and annoy you from this point on though is that the benefit statement TPS will produce will completely ignore the calculation that is forced by your break in service/opted out period and so your final salary pension will "look" as though it is going down. TPS refuse to include this calculation on the benefit statement by claiming that it depends on your future salaries, which, IMO, is a complete cop-out! i.e. as soon as you opt back in your Method A will drop drastically but it will always be used in the calculation to the start of the break. Now, there is something in the proposed legislation that will allow you to reinstate those missing months if you can tell TPS that the reason you opted out was because you didn't want to be in the career average scheme. Clearly being concerned about the effect on your final salary pension would be such grounds in my opinion. You would need to pay in the missing contributions and I would suggest you work out whether it's be worth it or not for you. As your method A was your best at the time you finished it is unlikely to be the case unless you were to carry on working for a few more years and your method B from the time was fairly close to it then.

@@dfountain Massively appreciate the help- Thanks for confirming that the break/opt out was the best way forward although I am still a bit paranoid about taking a lower salary and paying more TPS incase they remove my Method A current figure

This factsheet from TPS may help@ www.teacherspensions.co.uk/-/media/documents/member/factsheets/applying-for-retirement/hypothetical-calculations-v1-april-2019.ashx But I suspect you will want to message TPS directly and get them to confirm that your hypothetical calculation to the date of the break WILL use your final average salary - specifically the Method A - that was applicable at the time. Nothing wrong with being cautious.

Yes, a lot of tricky parts to this, not least because you are 9 years away from 60 and that's a lot of time in which to add to the CA pension. Taking a month out before your 2014 salary starts to drop off would seem to be a sensible precaution. As for taking the FS pension before 60 to sidestep the abatement question it's a lot trickier for those, like yourself, who would have to commit to taking a large proportion of the CA pension at the same time. The FS pension though will be, at most, 24/80ths of your salary and as such you may have sufficient headroom between your salary at that time and the limit that will be imposed. Especially if you were to consider moving to a part time role at that time. However, that is a long way off and so it's probably just worth keeping it in mind and considering again if you have any breaks in employment after you reach the minimum pension age.

@@dfountain thanks for your quick reply - I will definitely look at that - would I lose the AAB buyout election if I take a one month break and then restart as it was a one time offer to do it in 2015 ? Thanks again for your wisdom!

The Early Buy Out option is going to be re-offered from October since the McCloud judgement effectively restarts the 6 month clock.

@@dfountain excellent, thank you!

No. Part of the protection to new mothers is that maternity counts as continuous service (up to the year) so that they cannot be unfairly targeted for redundancy. In addition, whilst on maternity pay, you are adding the full amount of pension as though you were still working - even though your contributions could be less.

@@dfountain Thank you David. I’m going back part time so I will definitely look into taking a break from paying it as I’m dropping my leadership responsibilities (and pay!)

Great. Best place to start is with your statement. It will tell you what your current best "final salary" is based on. If it is Method A then a month out as soon as you return may be advisable. If it is Method B then check the dates involved, you will have up to 10 years after the starting date before you actually "need" a break. Download and save the one before you return on your new pay level as this will have your "salary" at the date you leave. You can then use this in the future to determine if you need another break or not.

@@dfountain Thank you! I don’t think I’ve ever seen my pension statement so I’ll look into finding it! I’ve been teaching for 8 years so hopefully been building up!

teacherspensions.co.uk - it is simple to sign up and get access to it.

Yes, those years are still included. Also if you were to go on to a much higher salary in the future that salary can still be used...though it would have to be a pretty good increase given that your 2014-17 figures are probably already around 10% higher than your current salary.

Thank you so much for excellent help here . Hoping opt out doesn’t take too long to process? … as best years on my pension statement start from 01/09/2014.. so needs to be done by September 2024.