Andrew Warwick-Thompson answers your questions.
Q. My questions relate to supply work I have undertaken since resigning a full-time teaching position in December 1991 on a deputy head's salary at the age of 42.
1 I have so far opted out of paying superannuation contributions on my supply work. Would it be advisable to resume these payments, bearing in mind both my former (comparatively) high salary, and the Teachers' Superannuation Scheme's operation of a "final average salary" clause for calculating pension benefits?
2 If I opt not to resume superannuation contributions what happens to the superannuation contributions (8 per cent of salary, I believe) employers would otherwise have had to pay into the scheme? Would it not be equitable to pay these contributions direct to an employee to supplement personal financial arrangements planned for retirement purposes?
A. The answer to your first question is that you will not lose out because you are now earning less.
Provided that you were a member of the TSS during your period as a deputy head, then the benefits that you accrued up until December 1991 will have been calculated by reference to your then salary.
If you resume payments to the TSS in respect of your supply teaching - you may only do so if you are a teacher in full-time service; part-time supply work is not currently pensionable - then on retirement from full-time pensionable employment your pension benefits will be calculated taking into account both periods of pensionable service as follows: Your benefits in respect of service as deputy head will be calculated according to the date of your resignation and revalued in line with cost-of-living increases from December 1991 up to your retirement age.
The benefits in respect of your full-time supply work will be calculated by reference to your final salary from that employment.
The higher of the two pensions, as calculated above, will be the one put into payment.
The answer to your second question is that it is a point for negotiation with your employer. If you elect to join the TSS then you and your employer will be obliged to pay the appropriate employee and employer contributions.
However, if you elect not to join TSS your employer is under no obligation to pay what would otherwise have been his TSS contribution to your personal pension arrangement, but you might be able to persuade him that it would be equitable to do so.
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. No personal correspondence will be entered into and no legal liability will be accepted for the advice offered.