Leader magazineASCL - Association of School and College Leaders

Warning issued over changes to 'average salary' calculation

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The Teachers' Pension Scheme is making a change on 31 December to the method of calculating the 'average salary' used for pensions. This will not affect many people, but it could be very serious for those who are affected. One of the methods of calculating the 'average salary' used for pensions will not be available for those whose pensions are payable after 31 December. This is 'the best 365 days in the last three years', which currently might be used if the final 365 days of service are not the highest paid.

From January there will be two methods left: either the 'last 365 days' or the average of three consecutive years of salary but with each year re-valued by the retail prices index - this is the most commonly used method. The change means that a few members retiring this year will need to take their benefits on 31 December in order to get maximum benefit; to do this they must stop work on 30 December and not one day later.

This may especially affect anyone who has 'acted-up' during a minority part of the last three years, particularly if they are expecting that event to affect their pension; similarly those who have stepped down to a lower paid teaching post expecting just one year of a high salary to be used for their pension calculation on some date in the next year or two. This change does not apply to those who stopped work before 1 January 2007.

If you think you are affected, it is important that you read the Teachers' Pensions 'Average Salary' factsheet precisely, which can be found at www.teacherspensions.co.uk/resources/factsheet10.htm After reading the factsheet, anyone with concerns should contact ASCL's pensions consultant, David Blake on david.blake@ascl.org.uk

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