In a time when a job for life is no longer expected, there will likely come a time when you choose a different career. Lasting 40 years or more in the classroom is an exhausting thought. At some point, whether it is for your health or just for a desire to do something different, you may choose a new career. Imagine moving to the police or to the civil service.
If you change careers, you could change pension schemes too. You could transfer your accrued years of service from your Teachers’ Pension Scheme to another and so keep the full benefits of your pension when you retire.
How do I transfer my pension benefits?
We are not going to fool you into believing it is an easy process to transfer your pension from one scheme to another. It can take some time – and a lot of information will be sought by several third-party organisations.
The process of transfer begins by registering or signing into your My Pension Online page on the Teachers’ Pension Scheme website. Here you will need to complete the application. You will then have to demonstrate a degree of patience, as the administration is done behind the scenes.
First, you need to be sure that you can transfer your pension. Your new scheme will need to be registered with Her Majesty’s Revenue and Customs (HMRC). It also must be the right sort of scheme; for instance, you cannot transfer your benefits to a defined contribution scheme and, for some, you will not be allowed to move to a personal pension scheme. Your transfer will also need to be made before you hit your normal pension age. Therefore, if you are close to retirement, you will need to seek advice on how long the process will take.
Then, the Teachers’ Pension Scheme will provide your new scheme with a transfer value. They will then inform you how much pension your transfer value will buy in your new scheme. There may be a gap, and you may want to seek independent financial advice to consider all the consequences of this valuation.
What if I leave it with the Teachers’ Pension Scheme?
If you have made more than two years’ contributions, you will still qualify for pension benefits. You will become a deferred member. When you reach normal pension age (or early retirement age, if you are prepared to accept actuarial deductions from your benefits) you can claim your lump sum and pension benefits.
The content in this article was correct on 10th March 2020. 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.