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Home/News/Teachers Pension/Teachers’ Pension: calculating your ill-health retirement award
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Teachers’ Pension: calculating your ill-health retirement award

04/10/2019 Racheal Smith

There are lots of criteria to consider when calculating your ill-health retirement award.  You will be within the Final Salary arrangement or the Career Average arrangement or a mixture of both.  You will be on an Accrued Ill-Health award or a Total Incapacity Enhancement.

Final Salary Normal Pension Age 60

If this is you, then your accrued pension will be calculated by taking your total reckonable service multiplied by your final average salary and dividing this by 80.  You will also get a lump sum that is equivalent to three times your accrued pension.

Final Salary Normal Pension Age 65

If this is you, then your accrued benefits will be calculated by taking your total reckonable service multiple by your final average salary and dividing this by 60.  There is no automatic lump sum, but you do have an option of up to 25% of your benefit as a lump sum.

Career Average Arrangement

If this is you, then your accrued benefits will be based on 1/57th of your pensionable earnings in each scheme year.  If you have elected to make faster accruals, then this rate will be different for that scheme year.  Each year a total is added to your pot and the amount revalued.  There is no automatic lump sum, but you can convert up to 25% of your accrued pension.

Total Incapacity Enhancement

Unless otherwise stated, you will be entitled to the Accrued Ill-Health Award.  However, you may be considered for Total Incapacity Enhancement. This means you are being considered under tier two health conditions.  If you are in the final salary arrangement NPA60 or NPA65, then your enhancement is based on half of the service you would have completed between the date of receiving the entitlement and your prospective NPA.  The same calculation is then made on this sum as if it was part of your standard pension, i.e. multiplied by your final average salary and divided by 60 or 80.

If you are in the Career Average arrangement with Total Incapacity Enhancement, then calculations will be based on half of the service you would have completed.  Your half service will then be multiplied by your current full-time equivalent annual rate of pensionable earnings and divided by 57.

If you are unsure what you could be entitled to, you may wish to speak to an independent financial advisor or seek support from your union representative.

The content in this article was correct on 12th September 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.

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Posted under: Teachers Pension

Tagged in: ill health, Teachers Pension



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