Q: I have been teaching in schools and contributing to the Teachers’ Superannuation Scheme for many years. For the past five years or so, I have also been lecturing on an hourly-paid basis at several FE colleges. My income from this work has averaged approximately Pounds 4,000 per annum. As my hourly-paid earnings have, until now, been non-superannuable, I have made my own contributions to a private personal pension scheme Now that hourly-paid earnings have been declared superannuable by the recent European ruling, I assume that it would be advantageous to me to contribute in future to the TSS rather than to continue to make my own arrangements, but I would be glad of your advice.

In addition, I would like to know what to do about backdating my contributions. Should I leave my personal pension contributions where they are, or should I withdraw them in order to backdate my TSS contributions? (I assume that for tax reasons it would not be possible for me to contribute to both schemes).

I am now 45 and would expect to retire at 6O.

A: Unfortunately, the European Court of Justice lays down principles but leaves it to national governments and courts to deal with the practicalities. The question you ask is such a practicality.

For the sake of argument, let’s assume that you will be able to obtain backdated membership of the TSS and that it will be worth your while to do so. What problems are likely to arise?

You can only contribute to a personal pension plan (PPP) in respect of “non-pensionable earnings”. Your earnings from the FE college fall into this category, but if you are able to accrue TSS pension rights retrospectively, they will become “pensionable earnings” and you will become ineligible to have made the PPP contributions.

Under the law as it stands, the personal pension provider will have to return your premiums to you, but you would lose the interest accrued on them in the past five years. You could then use the refunded net premiums to pay the backdated TSS contributions.

However, I think that the loss of interest would be harsh and it might be preferable if you could make a transfer of the full value of your PPP to the TSS by way of credit against the backdated contributions. Current personal pensions legislation would permit such a transfer, but the TSS rules would need to be modified.

Andrew Warwick-Thompson is a lawyer who works for Bacon and Woodrow, the international firm of actuaries and consultants. Readers who wish to put questions to him (no names will be published) should write to the Personal Finance Desk, The TES, Admiral House, 66-68 East Smithfield, London E1 9XY (fax 071-782 3200). No personal correspondence will be entered into and no legal liability will be accepted for the advice offered.