Yes, this is a tricky one to predict. Locking in a Method A is a more difficult decision than considering the method B as it has to be done quickly, a decision taken at the end of the year and not up to 8 years later. The key point to consider is whether your current salary is going to increase by more than inflation or not over the next year and then the year after that. Any time the salary increases by more than inflation then you will have locked in a lower salary than you would have had the following year and so makes it pointless. The trouble here is that you don't get to know what inflation is going to be for nearly half of the financial year until 13 months later. This makes it virtually impossible to assess whether your current Method A, the current salary, is going to be better than next year's or not. The advantage of locking in the Method A is that it will be increased by inflation. This makes it worth more than next year if the pay rise is less than inflation. If you can foresee 2 years ahead then you may decide that not opting out to keep the Method A but allowing the next two years to combine with it to give an average of those as a method B may be wiser. The advantage of doing that is you then have 3 of your most recent years used as a method B and you wouldn't need to opt out for a further 7 years to keep them since they last for 10 years anyway. Back to the Method A then with an example or two. Example 1. Your salary this year is £50,000 (Method A) 2023/24. You are getting a 5.5% pay rise. If inflation is going to be 2% then a "locked in" Method A would be worth £51,000 in a year's time The pay rise though would be worth £52,750 in a year. Conclusion opting out to preserve the Method A would not be worth it. Example 2. The salary in the following year is £52,750 (Method A) 2024/25 You get a 2% pay rise Inflation is 3% After a year the new salary would be worth £53,805 But a locked in Method A from Sep 2025 would be worth £54,332. (Note that the average Method B from the 2 years you would have in at that point would be the average of £52,530, £54,332 and £53,805 - the three years to that point with inflation of added to the first two, giving £53,556)

The best time is before it falls any further, this will happen when you get into the month listed as being the start of your 3 years, most likely September 2014. You have to opt out for a calendar month and this should be taken as the next calendar month after you submit the opt out form. Submit it now, in August, and they should take you out for September but if you waited until 1 September to send in the form then that should take you out of October.

@@dfountain yes, the start of my best three years is Sept 2014 so opting out for the month of Sept is not as good as opting out for the month of August but as the ship has sailed for opting out in August I should just do it ASAP

The first financial year, 6 April 2024 to 5 April 2025, that includes the pension being taken in September 2024 could well be hit by the abatement since you would be working full time for those 12 months. The second financial year, starting on 6 April 2025 is far less likely to have a problem since the salary would only be 5 month's worth, so even if you were working full time the total amount you would receive from the salary would be under 50% of a full time, full year, wage.

@@dfountain Thank you David, I was wrongly assuming the clock started only when you took the pension.

@@peterkeeley8997 It is in proportion, so starting on 1 September the limit will be 7/12ths of the revalued salary of reference assessed against 7 months of the salary and of the pension combination.

The part you have taken as "phased" is not affected by subsequent pay rises. This can only have an impact on the parts of the pension yet to be taken.

@@dfountain thank you.

Well no, a salary for those extra years would instantly result in a greater income than taking the pension so the total income for a person who carries on working and adding to their pension will have had a greater total amount paid into their account by 60 and, of course as you say, have a larger pension. What they haven't had is those extra years of being in charge of what they "spend" their time doing. I agree totally with your last sentence, the essence being to consider the whole picture where you are balancing "time" and "money" to give you what "works" for you.

www.teacherspensions.co.uk/forms/flexibilities.aspx You have to pay either with a lump sum or over a period of "years". As such you might want to work out how much you need to pay between now and 5 April and then juggle the monthly payments etc to get them to add up to the amount you need to pay to avoid paying the 40% income tax. Remember there are other pension products available outside the TPS - hence the need, I would suggest, for getting properly qualified financial advice.

Just to echo what David was saying, I’d definitely look at other products before paying more into the TPS. I have an S&S ISA and a SIPP to give me flexibility on access to my cash.

Yes, everyone who was illegally denied the opportunity gets this no matter if they have already retired, still working or have just left teaching. The only thing that prevents this is if you have had already taken the pension and, after getting your RSS, have made the choice of Option 1 or Option 2 for the remedy period.

@@dfountain thanks for replying David. Much appreciated

You do need to be careful in assessing what the "target" was back at the time of the break, that is the value in 2016, 8 years ago. That would use the revalued salaries from 2006 to 2016 and as such could produce a higher salary than any that you were actually paid. This sheet can help you work out what you need to "compare". docs.google.com/spreadsheets/d/1GUB2WnLHm2LFmPPv6ihwMvL7VVtQLALd8Zcf58-GnZ0/edit?usp=sharing

@@dfountain haven’t taken a break yet but I’m thinking of doing it now before going part time👍

@@christownsend1460 Sorry, I misread that. 44k in 2016 would now be equivalent to £57,780 - ensuring you check the value of those older salaries and act if necessary to protect them is the key. This may help you find that out: kzfaq.info/get/bejne/mdCep7CLl8q7Yok.html

@@dfountain thanks

Yes, the TPS, and all schemes affected by the illegal blocking of access to such voluntary extra contributions, have to reduce the costs by the amount of tax relief that would have been paid at the time. The legislation was written to do it this way so as to avoid putting an extremely heavy burden on HMRC who otherwise would have to re-open the tax accounts of potentially millions of taxpayers over each of the 7 years involved. The TPS assess the tax that would have been paid by the teacher using their salary records that they already hold. As such it is possible for tax relief at the higher rates to be accounted for as well. If an individual believe the calculation should have taken account of other income then they can write back to the TPS when they get their calculations/invoice with an explanation and evidence that more relief should have been applied.

@@dfountain Thank you - have to consider what to do now then.

Yes, so long as you have "transitional protection" then you were also, illegally, denied the opportunity to buy AP in the NPA65 final salary scheme. This sheet is one I knocked together for the NPA65 AP: docs.google.com/spreadsheets/d/1jU3Tw-NaD4JXGTIHIshUzK_xHpjMpY1Jp64V3A1h5IM/edit?usp=sharing

​@@dfountain I joined the scheme in August 2007 full time with no breaks in service, although I've just done one month opt out of TPS to preserve best salary (2014-1017). As I understand it I could buy 10 blocks max of AP???

The blue rows are "summary" rows but the way they were introduced was a little piecemeal and as such you can have a "summary" of just a single row at times. The concept, and what is mostly happening now, is that you get a new row (grey) for each separate month. This makes it easier to match up the values with your monthly pay slips and therefore be able to identify errors sooner. Then a summary row will span several months, or even a full year. However, when it was introduced the requirement to submit monthly data returns was optional. So you have many rows with no summary, early in your career, and then it is possible to have a variety of summary lengths.

The limits change each year though they are cumulative, so you cannot buy the maximum of £6,500 from 2015/16 and then another £6,500 in 2016/17. The list of limits is here: www.teacherspensions.co.uk/members/resources/forms/updates.aspx

​@@dfountainCan we be absolutely certain the final salary maximum was £6500 in 2015-2016 and 2016-2017? The link above only gives a career average figure for this period and then quotes £6400 for the final salary scheme in 2017-2018

@@jamescovell1379 Not certain at all! I have just found the guidance document for 2014-15 that says it was £6,200 for that year. Effectively that means £6000 as you have to purchase it in blocks of £250. However, we are interested in the following year. The increase is related to inflation but given that we know the limit the year before was £6,200 and then, two years later, is £6,400 in 2017/18 then the effective limit is likely to be £6,250 given the requirement for it to be in blocks of £250.

​@@dfountainMany thanks David. I'd been working on it being the case that the maximum additional final salary pension I could retrospectively purchase would be £6250 relating back to this era.

There is a complete separation between what you, as the teacher, gets and then what your spouse gets when you die. One has no impact on the other. If you take the max lump sum and smallest annual pension OR you take the normal lump sum and the largest annual pension it makes no difference as to what your spouse gets as their "survivor's pension".

They appear to have added this condition and I can understand the logic behind it. The option to apply for retrospective AP is based on the premise that you would have done it at the time but were denied the opportunity because of the illegal actions of the Government. Once a teacher has been made aware therefore they would be able to make this claim and there is no reason that they wouldn't know at this point what they "would" have applied for back at the time it was denied. However, it is also, in my opinion - so with no legal weight or qualification, likely that a teacher might have made applications over a period of years, one in 2016 then another in 2017 etc. That they were not making it known that there was going to be a monthly payment option is certainly grounds, I suspect, to cancel the application being made if it was based on what you could have afforded via the only option offered at the time, that of making a single lump sum payment. It may require some complaining and possibly appeals to the DFE and Ombudsman but the bottom line is that you should not be disadvantaged by the illegal actions of the Government.

Thank you very much David

Additional pension does not impact the automatic lump sum but you can "sell" some of it when you retire for the optional lump sum in the same 12-to-1 ratio.

@@dfountain 1 to 8, 1 to 12 out. Interesting 😄

@@ctfm938 You can only "sell" 25% though.

Yes, the SoR is the full time amount no matter what. It makes it far less likely that abatement will affect you if you continue to do 0.6 work. Once you take the pension it goes up each April in line with inflation. Once it is taken it is based on the salaries leading up to the date it is taken, future salaries have no impact on that pension.

There is no pension fund amount. The TPS is what is called an "unfunded" scheme. The contributions teachers pay go to the Treasury who then pay out the pensions, if the contributions paid by current teachers are less than the amount paid out then the Treasury pays the extra needed, if the contributions paid exceed the amount paid out then the Treasury keep the extra.

@@dfountain Thanks for your answer. In my case I'd like to transfer my funds to another provider, how do I know how much contributions have been paid to date that I can transfer?

The transition dates are here: www.teacherspensions.co.uk/employers/advising-members/eligibility/~/media/93CC7173567A46B2A3D99E4D242FCEE9.ashx Though the date you choose has to be one where you would have made this commitment at the time rather than trying to find the one that is the best value now of course.

@@dfountain Many thanks, Your speed of response and knowledge is impressive! I will choose a date soon after my transition date when I luckily received a lump sum from family!

The Faster Accrual in the remedy period has to now be offered as a conversion to Additional Pension. You should have been, or shortly will be, sent a message detailing the compensation and conversion figures, However, those figures are not directly comparable - see this video for my concerns on that: kzfaq.info/get/bejne/qJiKpNGEnLnUeWg.html

You divide it by £250 to see how many blocks you are allowed to buy, £6,500 = 26 blocks.

@@dfountain Thanks😀

It is a common response. They appear to be putting off people applying whilst they try to get up to speed with producing the RSS's (remediable service statements) for everyone as they must get that done before April and there have been delays in getting instructions from the Treasury about the tax status of refunds/compensation and interest.

Yes, there is this line on the retrospective additional pension form that says: "If you retire on ill-health grounds your additional pension will be paid immediately without reduction provided that you were in good health when you made your election and you became incapacitated more than one year after the date of the election." I can understand that someone has looked at the concept of retrospective pension and applied the rules that govern how they currently are written to prevent someone taking advantage of the scheme if they know they have a much shortened life expectancy but, as you say, doing this when you have been illegally denied that opportunity up to 9 years ago doesn't sit right. So, I have looked at the regulations: The Teachers’ Pension Scheme(Remediable Service) Regulations 2023 and in particular at CHAPTER 4, the remedial arrangements to pay voluntary contributions to the legacy scheme. Much of which I cannot really get my head around either! The problem I suspect is where it makes reference to the Schedule 4 of the 2010 regulations where there are sections that appear limit if AP can be purchased during periods of ill-health...none of which though negates your central argument that you could have bought it many years ago before any such restrictions might have had any effect. There is nothing in the remediable regulations, as far as I can see, that would otherwise bar those currently applying for IHR making an application for retrospective additional pension. It is likely going to requires a challenge to be made against the line on the form that requires you to be "in good heath when you made your election" and take that further to the DFE who may direct the TPS to look again at how them are implementing this option for those in your position and if that doesn't get a result then to the Ombudsman.

I suspect that they have not come up with a solution to this yet. They initially refused to accept teachers should be allowed to make monthly payments, insisting that they would only take a lump sum payment. Once it was pointed out, via a complaint or two to the DFE, that this was contrary to the legislation as well as to the natural justice that requires those illegally prevented from purchasing at the time to be given the same options they would have had access to back then, they relented. However, as far as I am aware they have not given anyone who has asked for a monthly plan any indication of how this will be processed.

Pensions is a devolved matter and so I don't know how they are going to implement this but, in essence, the same legal principle applies. Those prevented from buying this at the time by a the illegal change must be given the opportunity to do it.

@@dfountain Thank you for sharing your knowledge and understanding of pensions, and taking the time to reply to my question.

The TPS determine how much income tax relief you would have got and deduct that from the costs their calculator gives them. In other words HMRC is bypassed and does not get involved. It was decided that trying to re-open everyone's tax affairs from the 7 years would be too burdensome on HMRC and so to simplify it each scheme would assess how much income tax relief you would get and apply it for you. To do this the scheme looks at your teaching salary and works out how much and at what level you would have paid tax on the amount they are going to charge you. Step 1 - Work out the cost of buying additional pension (for example £20,000) Step 2 - Work out how much of that £20,000 would get 20%, 40% or 45% income tax relief applied to it Step 3 - Deduct the tax relief from the "bill". (If all of the £20k was to get 20% income tax relief then that bill becomes £16k) Step 4 - Work out how much interest needs to be charged on the "bill".

Yes. The window is based on when you get your "remediable service statement" (RSS). You have to apply for retrospective additional pension before you confirm your choices for the remedy period using that statement and within 6 months of getting the RSS.

@@dfountain Thanks David. I'm mid 50's and haven't had an RSS yet. Still teaching (adult education) and not planning to use TP until 60-62ish. TP website states "The member won’t need to make their choice on their remedy period service until they apply for retirement. They’ll receive their RSS as part of the application process." So looks like it gives me a while to apply but hoping to do so later this year. Assume it's ok to apply years before getting the RSS?

Sorry another thought... sounds like you may have to commit to which remedy service you will use before you can apply for this additional pension. If the scheme personalised calculator is to be believed (for age 62), I am drawn slightly more to CA rather than FS (nearly £2k more pension with £12K less lump sum). In which case, I may not be able to apply for retrospective FS additional pension - is that right? Sorry for the questions.

In other words, can I have FS additional pension but regular CA pension at same time? :-/

@@mmmatthew69 The legislation requires EVERYONE be sent an RSS by April 2025, so the deadline will be much sooner than when you intend to retire ;)

Yes, that message is designed to persuade you to stay in the scheme but it is really aimed at those thinking of opting out permanently and not for the reasons I refer to. I go through these points here: dfountain.co.uk/opting-out-warning-tps/ The only ones that relate to those taking a short-term break are the last ones that go over the death benefits.

Send them a message asking to be sent a copy of your statement.

Thank I have now done so

I too had this message. I phoned TPS and was told it was because I needed to provide them with my bank details to refund from the Rollback choices situation (hope that makes sense). They assured me that once the receive my bank details (another form to fill in from their website) then I will be able to see my statement online again. I hope this helps and isn’t confusing any issues.

Thanks Louise that’s kind of you to take the time. I replied to their response to my query which mentioned something to do with flexibilities. I don’t have any that I am aware of. In any case I will give them a ring and hope I have the same success as you did. Peter

If you are one of those with transitional protection and you have not already made your choice as to which scheme the remedy period will be counted in, then, yes, you will be able to buy retrospective additional pension. All those who were illegally denied this opportunity between April 2015 and March 2022 can apply to buy it if they would have bought it at the time.

It has been reported that the TPS are saying that you can make ONE application. The form itself doesn't allow for multiple years to be specified but as the premise for the legislation is to ensure you can get what you would have been able to get had it not been for the illegal actions of the Government this should be possible. Though I don't think this would give any advantage over asking for 8 blocks to start in 2015 and be paid for over a period of 8 years for example. There is a limit on how much you can purchase. (£6,500 in 2015/16 for example)

Yes, I made this spreadsheet just to do the lump sum calculations. The monthly ones is a little harder, and I am not sure it is even possible given the changes made to the costs if you spread the costs over the years where the contribution rates changes.

@@dfountainhow do I get them to do it though? Surely they must be able to work it out before I choose which number of years to spread over and then apply. Not getting anywhere with them though when asking for some options

Unless you have applied for retirement it is extremely unlikely you have had your RSS. Check your online account for "messages". I did apply before getting the RSS but I have heard of some others being told to wait until they get their RSS. The TPS have a mountain to climb in terms of meeting the deadlines for issuing those so I am not surprised they are doing that. Yes, it is reduced if you take it early.

Afraid I don't know. The retrospective process should put you back in the position you could have been in had you not been illegally prevented from doing so. However, there are also rules about making such applications close to a period where ill-health retirement is going to be taken. I suspect you may need to be able to justify, to a greater degree than normal, that you WOULD have made the purchase of AP back in the 2016 period.

When you get your figures do check that you are getting the tax relief you expect. Knowing the rough monthly costs would help if you wanted to spread the cost across several tax years, getting the extra 20% tax relief is likely to outweigh (don't take my word for it) the additional cost if you go into the higher cost periods.

Sorry, pensions is a devolved issue and as such NI will be handling this independently of how it is being done in England and Wales. I have not seen anything published in terms of what legislation they are adopting to handle it.

www.teacherspensions.co.uk/-/media/documents/member/applications/miscellaneous/apb-january-2024-v18-fs.ashx

If you do get it, is it reduced if you retire early as per normal pension? I suppose that may make it less worth it!