You could experience that awful time in a school when the budget tightens, and jobs are going to be lost. Your headteacher must make the choice whether to force redundancies or approach some team members who are within the retirement bracket. It could be a better solution for you, and the school if you took premature retirement.
It might also be that your employer may come to a point where they think they need to terminate your employment for other reasons. Rather than devastate your life and expect you to cope with unemployment, they may instead offer you’re a phased retirement.
How does this work?
Whatever the reason, premature retirement can only be granted with approval from your employer. The reason you need this approval is that your employer will be required to part pay the costs of your benefits. Any retirement request before your Normal Pension Age (NPA) are subject to actuarial adjustment. Under a premature retirement, your employer will pay the balance of what you would have received had you been permitted to work on to your NPA. This is called mandatory compensation. This can be expensive to a school but may still be less than redundancy pay.
Due to the changes to the Teachers’ Pension Scheme in 2015, you will need to take both your final salary and career average arrangements at the same time.
A difficult time
Whatever the circumstances, this will be a challenging time. You will need to re-evaluate how you spend your time. You will need to work hard to manage the transition, which could be challenging. It could also make your finances more challenging. You may wish to speak to an independent financial advisor who can offer ideas and support.
The content in this article was correct on 18th December 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.
