Phased retirement - PowerPoint Presentation

Slide1

Phased retirement

UCU branch

meeting

19.2.2013Slide2

Types of retirement

Normal age retirement

– NPA. Pensionable employment counts up to

75yrs. Unable to pay into TPS after age 75, even if working.

Phased retirement

– work part time and access part of your pension.

Actuarially adjusted benefits [AAB]

– claim your retirement benefits after 55yrs.

P

ension is spread over longer period therefore, smaller pension and lump sum.

Approx

4

% actuarially reduced per year.

Premature retirement

– employer’s discretion.

Ill-health retirement

– permanently unfit to teach before NPASlide3

Phased retirement

A way to combine your pension with more flexible working arrangements

Can access

up to 75% of pension

from age 55yrs without ceasing work

completely

Must reduce work by at least 20% for at least 12mths. Can then go back to FT if post is available

Before

age 60, pension is actuarially

reduced

After age 60, pension abatement applies

This

option can be accessed twice before final retirement

Must be agreed by employerSlide4

Pension abatement [reduction]

Between 55yrs and 59yrs

11mths

–

taking phased retirement means you are not

subject to pension

abatement

If you retire once you are 60+yrs

and in TPS prior to 2007, pension abatement

applies

Pension abatement:

cannot return to

HE

after retirement and earn more with your pension plus pay than you would have earned before retirement. Can access tax free lump sum only

If you work in areas other than HE after retiring, you are able to access all your pensionSlide5

Benefits of phased retirement

No break in service

You do not lose accrued rights to sick pay,

redundancy notice

or redundancy

pay

You continue to add further years of service into the

scheme

You

continue to be covered by death in service grant

Succession planning for employer

Employ newer staff on lower salary grade – cost efficiency

Employee continues as a member of TPS

Employer retains expertise of TPS member for several more

years

After being on phased retirement for minimum of 12mths, you may apply for permanent retirement or return to your previous post if the hours are availableSlide6

Example to illustrate

Member is 58 years

old, salary

is £40,000.  Has 20

yrs

service in

TPS.

On taking phased

retirement,

at least a 20% reduction in salary is required so £40,000 x 80

% =

£

32,000

C

an then take

up to 75% of pension, so will take 15 years pension rather than 20 years, and this pension will be actuarially reduced using a factor of 91.1

%

[since actuarial reduction is

approx

4% per

yr

]

So pension will be (£40,000/80 x 15) x 91.1% = £6,832 plus an automatic tax free lump sum of £

20,498

The member works two further years at 0.8, but is still based upon £40,000

salary

Therefore when the member reaches the age of 60 and decides to take age related retirement they will receive another pension of (£40,000/80 x (5 + (2 x 0.8)) = £3,300 plus an automatic tax free lump sum of £

9,900

This is where the 5 relates to the number of years left in the scheme when the phased retirement began, and the 2 x 0.8 being the extra service added to the

schemeSlide7

Applying for phased retirement

https

://www.teacherspensions.co.uk/public/resources/~/

media/Files/Documents/Forms/TP_Mem_Form_Phased_App.ashx

https://www.teacherspensions.co.uk

/

Apply using the Flexible Working Policy:

http://

www.yorksj.ac.uk/human-resources/hr/policies-and-procedures/a-z-results-page.aspx?idx=4133&idxltr=F&menupage=7152

Note:

you are responsible for checking your pension contributions – no duty of care in pensions!