Career Avg. Pension vs. Getting on old scale

evolving_doors · 03-11-2017 08:52AM #1

A few posters are asking about getting on the old scale because of some sub work they did years ago.
But
As the new pension scheme is career average could this actually instigate a significant reduction in their pension... especially if they are still subbing/not on full hours.

So someone might have done a small bit of subbing in 2007 (in vec with qualified degree).
Ten years later they go back and do the PME and start off the grind of part time work in 2017 etc.
Are the absent 10 years calculated as service, thus dragging down their career average significantly?

r93kaey5p2izun · 03-11-2017 01:22PM

Would it only be included if they paid pension contributions on the VEC work? A lot of those in this position didn't.

But I think the issue you raise has potential to become a massive problem in the future. I'm on the old scale and pension but will seriously struggle to make full pension because of years spent on part time hours. I think this will be a significant problem for all those affected by the casualisation that went on over the past 15 years.

But yes, the problem looks like it will be even bigger for those on the new pension. It looks like it could end up similar to the current system with the state pension where lots of women have a much reduced pension due to time out to raise a family - they may have the same total contributions as someone who worked here for only 10-15 years but it's averaged over a longer period so reduces their entitlement. Years of casual, part time subbing and unemployment that have affected many teachers will impact on their pension. Time away on maternity leave but not covered by a contract will also bring it down - this has been a common issue over the past few years.

I wonder about those who moved abroad for work too. Whether pre or post 2011, the break in service puts them on the new pension either way. And if they worked here before leaving then the average of their earnings/contributions here will be brought down by the time away.

rainbowtrout · 03-11-2017 03:27PM

I would have thought rather than looking at gaps in service that career average earnings would be just that.

Calculate how many years were served cumulatively, calculate total earnings in teaching from those years of service, get an average.

So if you did 6 months work in 2007, it counts as 6 months service, and then if you did not resume service until 2017 and then work another 29.5 years straight through, that it would be the earnings over those 29.5 years, plus the 6 months earnings 10 years earlier, divided by 30 years service to calculate the average.

Either way new entrants will find their pension at the other end poorer than what existed pre 2013, with career average, reduced scale, longer scale, and years spent on part time hours.

It's highly unlikely anyone going into teaching now will ever serve a full 40 years, time wise or contract wise.

In terms of the absent years, i'd look at it the same way as career break is treated, it's not counted for years of service, seniority etc.

r93kaey5p2izun · 03-11-2017 05:42PM

That would not be as bad rainbowtrout. That's not how the OAP average calculations work in the new average contributions system though which is why I thought this average pension system could be the same. I hope it is as you describe though.

I don't think absent years would necessarily be treated like career break though as that's approved leave. Particularly if you were to claim those years for incremental credit if you had worked abroad, it would be difficult to see then how they would be discounted from years service for pension calculations.

It would be good to get more clarity on it.

rainbowtrout · 03-11-2017 05:56PM

I don't know to be honest, I'm just basing it on the fact that when a teacher moves from one school to another, particularly when they move from ETB to Dept or vice versa, they usually get a statement of service, so you would be looking a cumulative service to be put on the correct point on the scale, but also to calculate pension entitlements.

As for the incremental credit, I don't know. Pros and cons: get your years for teaching in the UK or wherever, so you get put on a higher point on the scale and your years are counted towards the pension, but the career average earnings is then divided by a larger number of years.

I know if you are transferring between primary and secondary etc, it's probably more straightforward as you are still paying into the public sector pension pot, but I always imagined that if you were getting incremental credit for work abroad, that it was merely to recognise your service and put you on the appropriate point on the scale, but those years don't count towards the pension here as you wouldn't have made the necessary contributions.

Career Avg. Pension vs. Getting on old scale

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