We often long for retirement when we are at work. We feel the grind, particularly in our 50s when we may have been working for more than 30 years. However, we may live for a long time, and we might be surprised at how bored we get in retirement. You never know, you could miss the classroom and the daily interaction with young people. Alternatively, you may feel that you cannot cope on the amount your teachers’ pension provides, and you need to earn additional funds to support your lifestyle.
Returning to work
Whatever your reason for wishing to return to work, you still have this option even if you have retired. However, there may be significant consequences for your pension if you do. Therefore, you need to make sure you are aware of the financial implications for going back to the classroom.
First, you will need to inform the Teachers’ Pension Scheme if you return to pensionable employment, even if you choose not to make pension contributions. Why? The regulations relating to the Teachers’ Pension Scheme claim that you cannot exceed your index-linked salary of reference when combining your pension and any contributable salary.
Your salary of reference is the highest rate of pay used when calculating your average salary, which is indexed to the tax year of re-employment. If you return to work full-time and continue to receive your pension, it is possible your pension and salary combined could exceed this amount.
Since 2018, your employers have been required to provide information on your service each month. Therefore, when you begin employment, you will only need to complete a certificate of re-employment if required by the Teachers’ Pension Scheme, though you may wish to check.
What does this mean for you?
If you are told you need to complete the form and you fail to do so, you could have your pension suspended. Your failure to inform the Teachers’ Pension Scheme could have resulted in an overpayment on your pension.
If you are receiving a phased, early retirement or career average benefits, you do not need to worry about the certificate of re-employment. However, if you are in receipt of Age, Premature retirement, phased final, or additional service after retirement benefits based on the final salary scheme, then it could apply.
Therefore, if you are considering returning to work, there are two questions to ask a) will it be worth my while? And b) do I, or do I not, need to fill in the form informing the Teachers’ Pension Scheme. To understand your circumstances better, it is essential to speak to a financial advisor before undertaking work after retirement.
The content in this article was correct on 19th July 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.