This note is provided for the Department for Education (DfE) as scheme manager of the Teachers' Pension Scheme (TPS).
A member in the career average section who has a Normal Pension Age (NPA) over 65 may elect to pay contributions to buy out the standard reduction ("buy-out election") for a period of up to 3 years.
The purpose of the note is to provide the DfE with guidance on how to determine the contributions required if a member makes a buy-out election.
Details on the member contributions required for buy-out elections can be found in the Buy-out election section.
There is a limit on how much extra pension a member can purchase in the career average scheme. The Limit on extra pension section sets out how to determine the value of the buy-out election for the purpose of the extra pension limit.
The following changes have been made when reviewing this guidance:
- Important information around the expected audience for the guidance, use of the guidance, review of factors, compliance and limitations applies across all sets of guidance. Rather than being repeated in each set of guidance, this can now be found on the scheme home page. It is important to read this information alongside the guidance.
- Calculation methodology: No changes have been made to the calculation methodology.
- Examples: There are no examples in this guidance. Worked examples, using the calculation methodology, can be found in prior versions of the guidance (though please note that these use historic factors).
- Factor tables: The "Factor Tables" tab contains the names of the tables that are referenced in the calculation methodology. The tables of factors themselves can be found in the most recently published "Consolidated Factors Workbook" which is available by clicking the "Download current Consolidated Factors Workbook" button on the scheme's home page.
- Assumptions: The key assumptions underlying the factors in each note are contained in the Consolidated Factors Workbook.
- Regulations: The regulations that require the production of the actuarial factors and/or guidance that is the subject of this note are summarised in the "Regulations" tab.
