School Reps' Handbook > Your questions answered

Pensions

Warning: This information is correct at the time of writing (November 2004) but significant changes in the Teachers' Pensions Scheme are likely to be put in place in the near future.

Why the teachers' pension scheme?

The NUT strongly recommends that teachers make their pension provision through the Teachers' Pension Scheme. Full-time teachers will be in the scheme automatically, but part-time teachers will have to opt to join it.

How do contributions work?

The contribution made by teachers to the Teachers' Pension Scheme is 6 per cent of gross salary. This is deducted before teachers pay tax. They therefore receive tax relief on their contributions. Teachers pay the lower 'contracted out' rate of National Insurance contributions. The employer, either the LEA or, in the case of a grant maintained school, the governing body, pays into the scheme an amount which is calculated as 7.2 per cent of the teacher's salary.

What pension can I expect?

The pension is calculated as 1/80th of average salary per year of total pensionable service.

There is a lump sum of 3/80ths of the average salary per year of pensionable service.

The average salary is the best 365 days pay, over the last three years of service.

What about early retirement?

In certain circumstances, for example, in the event of an early retirement on the grounds of ill health, there is provision for the early payment of the pension and the lump sum. In schools where there is a threat of redundancy, premature retirement (with a consideration of enhancement) can be offered to teachers aged 50 and over as a way of avoiding compulsory redundancy.

Are there any other benefits?

Other benefits include provision for widows' or widowers' pensions; dependants' and children's pensions; and death in-service benefits.

Where can I get more information?

For further details you should direct members to: