Career Average Scheme Key Issues

The TPS changed in April 2015. New members will automatically join the new career average scheme. Most existing members have transferred across but some members will remain in the final salary section of the scheme depending on their age. The NUT opposed the changes because they make teachers pay more, work longer and get less in retirement.

Key points of the new career average scheme from April 2015 onwards:

  1. a career average basis for the scheme;
  2. an increase in the normal pension age (the age at which pensions can be taken in full), so that for future accrual the normal pension age would be equal to state pension age of up to 68 or even higher;
  3. an accrual rate of 1/57th of pay per year of service (up from 1/60);
  4. accrued benefits for serving members of the scheme to be re-valued annually in line with CPI inflation plus 1.6 per cent (down from national average earnings);
  5. accrued pension rights (built up under the pre-2015 final salary scheme) will be protected;
  6. transitional protection for members close to normal pension age
  7. pensions in payment to be increased each year in line with CPI inflation

Paying More (average 9.6%) April 2015 saw a move from an eight-tier contribution structure to a six-tier structure. Some members will pay less while others will pay more. But all teachers are paying more compared to pre-April 2012 when teachers paid 6.4 per cent.

Working longer
The new scheme links the TPS normal pension age (the age at which teachers can get their teachers’ pension in full) to the State pension age. Retiring earlier would only be possible on a reduced pension. Subject to transitional protection arrangements this means that:

As at April 2015, all teachers aged under 37 would have to work until age 68 for a full pension.
Anyone aged 37 to 53 would have to work to 67
Anyone aged 54 to 57 would have to work to 66
If the State pension age rises in future, the age at which teachers can get their teachers’ pension in full will rise too - to 69 for those retiring in the late 2040s.

Getting less
In theory, career average can be better for the few teachers who don’t get promotion during their careers, but here the Government is using careeraverage as a way to cut pensions for most of us.