Frequently asked questions: pensioners
1. Why has my pension been reduced upon reaching state retirement age?
2. Why has my tax code changed?
3. Who decides on the pensions increase each year & when is it done?
4. What is this year's pensions increase?
5. If this years pension increase (PI) is 3.1 percent, why has my gross monthly amount not increased by 3.1 percent?
6. My late husband/wife said that my widow/er’s pension would be half of his/her pension. Why is my pension less than half?
The Teachers' Superannuation Regulations provide that retirement benefits are based on total reckonable service and average salary less any deductions in respect of the flat-rate national insurance scheme and the graduated pension scheme.
If you started pensionable teaching employment after June 1948, your pension contributions were lower because of National Insurance legislation until 31 March 1980. The basic rate of pension is accordingly reduced by £1.70 per annum for each year of service between these dates.
The Teachers' Pension Scheme was contracted out of the National Insurance Graduated Pension Scheme. If you contributed to that scheme between 3 April 1961 and 5 April 1975, your teacher's pension will be reduced to take account of the extra state pension you will receive. The state pension is made up of: the basic state pension and an additional pension from State Earnings Related Pension Scheme (The amount received depends on the level of your salary).
For more information on your state pension contact Contracted-out Employment Group at:
HM Revenue & Customs NI
Contributions Office
Contracted-out Employment Group
Longbenton
Newcastle upon Tyne
NE98 1ZZ
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This is directed by HM Revenue & Customs in accordance with announcements made in the budget. For further information and questions about your income tax assessment, please contact:
HM Revenue & Customs
Moira House
121 Hillsborough Road
Lisburn
Co. Antrim
BT28 1LA.
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The Secretary of State for Social Security makes the announcement in a draft Pensions Increase (Review) Order which is approved by Parliament usually during March each year. The new rate of increase takes effect from the first Monday after 5 April each year.
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The rate of increase from 11 April 2005 is 3.1 percent. In common with other public service pensions, teachers' pensions are increased annually each April in line with the retail prices index, so as to maintain their purchasing power. The rate of increase will not, therefore, necessarily mirror any rate of increase of teachers' pay; it might be higher or lower. For pensions payable before 55, this increase will not be payable until the 55th birthday. For previous years the rates have been as follows: -
12 April 2004 – 2.8 percent
7 April 2003 – 1.7 percent
8 April 2002 – 1.7 percent
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PI is applied from 11th April 2005, so unless the first payment after the new PI figure is applied is on 10th May 2005, the first months increase will never exactly match the annual increase.
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The widow/er’s pension is half of the pension if all of the member's reckonable service counts for family benefits. If all of the service was not covered then the pension will be a smaller proportion of the member's pension based on the number of years counting towards family benefits.
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