The Government has confirmed that career average pension rights for members in teaching will be increased by 1.5 per cent in April 2016.
Most teachers are now in the career average section of the Teachers’ Pension Scheme. Their pension is being built up at 1/57 of their pensionable earnings each year. These pension rights are then increased each year until retirement at CPI inflation + 1.6 per cent for teachers who stay in teaching.
The increase is based on the CPI figure from September 2015, which was minus 0.1 per cent. However, the Public Service Pensions Act 2013 means that a negative inflation figure can be used for indexation of accrued career average rights.
As expected, the Government is therefore using an indexation figure of 1.5 per cent (minus 0.1 per cent plus 1.6 per cent).