Your Questions Our Answers
     

Superannuation - Increasing your Benefits

 
  Q How can I increase my pension benefits  

The options are:

  • Purchase of Past Added Years.
  • Payment of Addition Voluntary Contributions (AVC's) to Prudential Life and Pensions, under the special scheme arranged with that company.
  • Payment of Free-standing Additional Voluntary Contributions (FSAVCs).
  • Purchase of Current Added Years.

In certain circumstances you may also elect to pay extra contributions to increase the amount of family benefits which may become payable.

Click here for an illustration of costs of increasing your benefits

 
     

Past Added Years

 
  Can I pay more into the scheme to make up for lost benefits when I was not working, due to time out for bringing up my family?  

The scheme enables you to purchase - at full cost to you - extra years of service which would not otherwise count for benefits.

The additional years must relate to a period when you were over the age of 20 but were not in pensionable employment (e.g. were not teaching).

An election to purchase Past Added Years must be made while you are in pensionable employment.

There are different methods of payment, the main ones being by lump sum or by percentage deductions from salary.

Click here for an illustration of costs of increasing your benefits

 
     

Past Added Years - The Costs

 
  Q What does it cost to increase my pension benefits?  

The cost depends on your age and your salary. For example, a teacher aged 45 could but one "Past Added Year" at a cost of 1.92% of his or her salary, over a 10 year period.

It is possible for employers to purchase Past Added Years on behalf of a teacher, by lump sum.

Click here for an illustration of costs of increasing your benefits

 
     

Current Added Years

 
  Q Can I increase my benefits even though I am not currently working?  

If you have been a member of the STSS but are not at present in pensionable employment (e.g. if you are temporarily teaching abroad, or if you are temporarily doing different work in this country), you may be able to purchase "Current Added Years".

This increases your reckonable service under the scheme, improving your eventual retiral benefits. This facility is not available if you have opted out of the STSS in favour of other pension arrangements, nor if you are aged 60 or over.

To purchase Current Added Years, you must apply within 3 months of leaving pensionable service, or within 6 months if you are teaching abroad. There are limits on the period you can cover.

You have to pay both your own normal contributions and the contributions which your employer would normally pay, over the period of the absence (the total of these contributions being, at present, 12.9% of your salary).

Click here for an illustration of costs of increasing your benefits

 
     

AVC's with the Prudential

 
  Q What other ways can I use to increase my pension benefits?  

You can choose to pay Additional Voluntary Contributions to Prudential Life and Pensions in order to buy extra pension benefits.

These contributions would be deducted from your salary and would attract tax relief (subject to Inland Revenue limits).

Your AVC savings are invested by the Prudential, for example in company shares, Government stocks and property.

Profits (which are free of all UK income and capital gains tax) are added to your individual account in the form of annual interest, bonus additions and a terminal bonus.

The return cannot be guaranteed in advance; but each year you receive a Benefit Statement which shows how your investments are progressing.

You may pay AVC's to increase your own pension, any dependant's pension, the lump sum death grant, or any combination of these.

Please note that the benefits gained from your AVC's are paid separately from your normal STSS benefits.

The Prudential provides an information pack upon request. This illustrates benefits at retirement based on recent investment performance.

Information on the Prudential AVC scheme.

Click here for an illustration of costs of using Prudential AVC's to increase your benefits

 
     

Free Standing A V C's

 
  Q Can I use another provider for A V C's?   Yes you can use any Company who provides an AVC scheme.
Are available from many Providers click the AVC's hyperlink to find out more 

Click here for an illustration of costs of AVC's
 
     

I.S.A.

 
  Q What other ways can I use to increase my pension benefits?   Are available from many Providers click the ISA's hyperlink to find out more   
     

Benefits at Death        Life Assurance Explained

 
  Q What will be paid to my Husband/Wife if I die?  

A lump sum, plus a percentage of your pension. This amount will be determined by sex, and size of family. Ask CJR Associates for an illustration of your entitlement.

Click here for an illustration of costs of increasing your protection benefits

 
     

Ill Health                           Income Protection Explained

 
  Q How do I protect my income against illness?  

You will be entitled to 6 months full salary, followed by 6 months Half salary

Click here for an illustration of costs of increasing your protection benefits

 
   

Retirement Age

 
  Q When can I retire?   Whether you are a man or a woman, you will normally be able to retire from teaching and qualify for your retirement benefits when you reach age 60, irrespective of the length of your service. If you remain in teaching after age 60, benefits are payable when you eventually retire (or at age 70 if for any reason you were still in service; most teachers have to retire at age 65). Normal retirement at age 60 or over, as described in this paragraph, is known as age retirement.

Retirement benefits can be paid before age 60 but only;

if you are retired on ill-health grounds;

or

If you are prematurely retired because of redundancy or in the interests of the efficient exercise of your employer agrees to the early payment of benefits).

If you leave teaching before age 60 but not on ill-health or premature retirement grounds, your benefits can be "Preserved". You would not, however, qualify for retirement benefits unless you had completed one of the following periods of teaching service:

2 years of pensionable employment after 5 April 1988; or

2 years of pensionable employment, if you were in service on 6 April 1988; or

5 years of pensionable employment at any time.

Click here for an illustration of your retirement benefits

 
   

Calculating your pension

 
  Q How do I Work out my pension?   Multiply your years of service times your salary and divide by 80.
Alternatively, contact CJRAssociates for an illustration

Pensionable Salary is basically your best salary for any 365 consecutive days in the last 3 years of teaching,

Reckonable Service is basically the amount of service you have accrued in the scheme. There are slightly different arrangements for part-time teachers; see below.

Annual Pension
You pension amounts to 1/80th of your pensionable salary for each year of service (days being expressed as a decimal fraction of a year). For example: a teacher retiring at 60 with 30 years 125 days' service on final pay of £20,000 would normally receive: £20,000 x 30.3425 x 1/80 =£7,585.63 per year

Lump Sum
Your tax-free lump sum is usually 3 times the amount of the annual pensions, e.g. £22,756.89 in the above example.

It is basically calculated as 3/80ths of your pensionable salary for each year of service (days again counting as fractions of a year).

Click here for an easy to understand illustration of your retirement benefits
 
   

Family Benefits

 
  Q What benefits do my family get?   If you die before retirement, the scheme provides for payment of widows',widowers', children's and dependants' pensions, in addition to the death gratuity. 
Short-term and long-term pensions are provided, depending on the amount of eligible service you have in the scheme.

Eligible service in these circumstances is known as family benefits service.

Qualification

To qualify for most of these benefits, you must normally have completed 2 or more years of eligible service.

All service from 1 April 1972 counts for family benefits in the case of a married man.

Service after 5 April 1988, plus any service before that date which you elected to purchase, counts if you are a married woman.

Short-term pensions for widows, widowers and children

If you die in service, or within a year of leaving service on health grounds but without an ill-health pensions, a short-term pension equal to your contributable salary at the time of death may be paid. It is normally paid by your employer to your spouse, for 3 months from the date of death. Additional short-term pensions may be paid if you leave a child or children.

Long-term pensions for widows and widowers

Long-term pensions are paid at the rate of one 160th of your pensionable salary for each year of your eligible service.

These pensions normally begin when the short-term pension ends.

If all your service counted for family benefits, the long-term pension would be half the rate of the pension you had earned up to the date of death.

If only part of your service counted for family benefits, the pension would be proportionately less.

Children

Children's pensions are paid for children under the age of 17, and for older children if they are in full-time education or certain kinds of training.

If you leave one dependant child, an amount which is normally equal to your widower's pension.

A child's pension ends if the child marries.

If there is no widow or widower, an orphan's pension may be paid. This would be at a higher rate than the child's rate of pension.

Dependant's Pensions

If you are not married, you may nominate a financially dependent close relative to receive pension benefits if you die.

You can nominate:
A widowed parent or step-parent; or a brother or sister who has never married or who is widowed.

CJR Associates will be happy to advise what benefits apply in your circumstances
Please complete the CJRAssociates online enquiry form

 
   

More information

 
  Q How do I obtain more information?   Contact the Scottish Office Pensions Agency, St Margarets House, Edinburgh
or complete the CJRAssociates online enquiry form
 
         

Go to more Questions and Answers on the TSS >


CJR Associates 
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CJR Associates, 32-34 Ferry Road, Edinburgh, EH6 4AE
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 To get to know more about how CJR Associates can help you in the many area's of independent financial planning, investments and pensions, call 0131 467 7406 or 01896 757223 or e mail us on cjrassociates@lineone.co.uk

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