Defined benefit teacher's pension.
Discussion
I've got a SIPP
Mrs Furba has a teacher's defined benefits pension and a couple other small pensions from other teaching work.
Ahead of the budget, I am thinking of drawing a 25% TFLS. I perhaps naively assumed that she could too. But I've just spoken to the pension bloke for the school and he says not. He said she won't be allowed to.
He also says that no capital value can be provided for the scheme, so she cannot include it in her assets and liabilities statement. Though I am sure she previously was given one.
Does the above sound right?
TIA for any knowledgeable advice.
In short, yes that's right.
Teachers pension is an unfunded public sector scheme, so there is no specific pot of money. Sometimes a notional cash equivalent value is shown on an annual statement but it's irrelevant unless there's a divorce.
The older version had a 3x initial annual pension as a tax free lump sum, payable when you start drawing it.
More recent version there is no lump sum as standard, only if you commute (convert) some of the annual pension into one. That's done at a rate of 12:1 regardless of age, which is a pretty bum deal compared to keeping the £1 for life, increasing by CPI uncapped each year.
You can only take a lump sum at the same time as starting to draw the annual pension, which if before the normal retirement age will mean an actuarial reduction for early payment. You must be at least age 55 at the moment.
Teachers pension is an unfunded public sector scheme, so there is no specific pot of money. Sometimes a notional cash equivalent value is shown on an annual statement but it's irrelevant unless there's a divorce.
The older version had a 3x initial annual pension as a tax free lump sum, payable when you start drawing it.
More recent version there is no lump sum as standard, only if you commute (convert) some of the annual pension into one. That's done at a rate of 12:1 regardless of age, which is a pretty bum deal compared to keeping the £1 for life, increasing by CPI uncapped each year.
You can only take a lump sum at the same time as starting to draw the annual pension, which if before the normal retirement age will mean an actuarial reduction for early payment. You must be at least age 55 at the moment.
PistonHead007 said:
In short, yes that's right.
Teachers pension is an unfunded public sector scheme, so there is no specific pot of money. Sometimes a notional cash equivalent value is shown on an annual statement but it's irrelevant unless there's a divorce.
The older version had a 3x initial annual pension as a tax free lump sum, payable when you start drawing it.
More recent version there is no lump sum as standard, only if you commute (convert) some of the annual pension into one. That's done at a rate of 12:1 regardless of age, which is a pretty bum deal compared to keeping the £1 for life, increasing by CPI uncapped each year.
You can only take a lump sum at the same time as starting to draw the annual pension, which if before the normal retirement age will mean an actuarial reduction for early payment. You must be at least age 55 at the moment.
Thank you.Teachers pension is an unfunded public sector scheme, so there is no specific pot of money. Sometimes a notional cash equivalent value is shown on an annual statement but it's irrelevant unless there's a divorce.
The older version had a 3x initial annual pension as a tax free lump sum, payable when you start drawing it.
More recent version there is no lump sum as standard, only if you commute (convert) some of the annual pension into one. That's done at a rate of 12:1 regardless of age, which is a pretty bum deal compared to keeping the £1 for life, increasing by CPI uncapped each year.
You can only take a lump sum at the same time as starting to draw the annual pension, which if before the normal retirement age will mean an actuarial reduction for early payment. You must be at least age 55 at the moment.
She works for a private school, but I assume it's the same scheme.
But you have repeated almost word for word what he said.
I may be being pedantic for the purposes of this thread but I think that the teachers pension scheme would need to provide a value of the pension in the future assuming the plans to include pensions in IHT come to fruition. In situations where it will pay out to an unmarried partner upon the death of the teacher for IHT purposes as well as in divorce cases. Just wanted to highlight in case people look at this in the future.
SunsetZed said:
I may be being pedantic for the purposes of this thread but I think that the teachers pension scheme would need to provide a value of the pension in the future assuming the plans to include pensions in IHT come to fruition. In situations where it will pay out to an unmarried partner upon the death of the teacher for IHT purposes as well as in divorce cases. Just wanted to highlight in case people look at this in the future.
Sure.As I said, they have done so before.
SunsetZed said:
I may be being pedantic for the purposes of this thread but I think that the teachers pension scheme would need to provide a value of the pension in the future assuming the plans to include pensions in IHT come to fruition. In situations where it will pay out to an unmarried partner upon the death of the teacher for IHT purposes as well as in divorce cases. Just wanted to highlight in case people look at this in the future.
The proposals specifically exclude widowers, widows and dependents pensions payable from DB schemes from IHT.craig1912 said:
SunsetZed said:
I may be being pedantic for the purposes of this thread but I think that the teachers pension scheme would need to provide a value of the pension in the future assuming the plans to include pensions in IHT come to fruition. In situations where it will pay out to an unmarried partner upon the death of the teacher for IHT purposes as well as in divorce cases. Just wanted to highlight in case people look at this in the future.
The proposals specifically exclude widowers, widows and dependents pensions payable from DB schemes from IHT.Gassing Station | Finance | Top of Page | What's New | My Stuff