Seán Taylor, Principal Trade Union Case Worker at NSEAD, shares a statement for Teachers' Pension Scheme members in receipt of a communication from TPS about Transitional Protection.
Recently, the TPS have sent communications to thousands of teacher members regarding something referred to as ‘Transitional Protection’. In short, this is nothing to worry about.
The government made a significant legal mistake when the TPS changed in 2015 from a final salary scheme to a career average scheme. What they did was to allow TPS members, who were within ten years of their normal retirement age as of 2015, to remain in their final salary schemes, while other members moved to the new career average schemes in, or after, 2015.
This ‘transitional protection’ was found to be discriminatory in a court case often referred to as McCloud and Sargeant.
Accordingly, as the government lost the court case, they must now introduce a remedy. The proposed remedy will ensure that all affected members have access to the scheme that they consider is better for them for the period involved.
In short, this means that when it comes to planning for your retirement, you will be able to access ‘free’ independent advice that will allow you determine which pension accrual method works best for you. (It’s not just a simple case of saying final salary is better than career average, as individual circumstances for each member affect their pension accrual, which is why individual independent advice has to accompany the remedy.)
The legislation required to comply with the Transitional Protection remedy, as per the government’s consultation response, is being rolled out in two stages.
The first stage was to introduce the Public Service Pensions and Judicial Offices Act 2022. This Act legislates for how the government will remove the discrimination identified by the courts in the way that the 2015 reforms were introduced for some members. The Act also sets out that from 1 April 2022 all those in service in the main unfunded public service pension schemes, including the Teachers’ Pension Scheme, will be members of the career average (reformed) schemes, ensuring equal treatment from that point onwards.
Stage two will address the different treatment of members between 1 April 2015 to 31 March 2022 (the remedy period) and will be implemented once the necessary secondary legislation is in place and the TPS systems have been adapted. Phase two will return transition members’ service to the final salary legacy scheme for the remedy period and allow members to make the choice between final salary and career average pension benefits for that service.
Access to independent financial advice as understood is that it will be made available for those contacting TPS and requiring help, and at no cost to the TPS member.
As NSEAD are not regulated by the Financial Conduct Authority, we cannot provide financial advice. But we hope this blog clarifies a few things, and that you’ll now know what to ask of the Teachers' Pension Scheme when you speak with them.
About the writer
Seán Taylor is NSEAD's Principal Trade Union Case Worker. Seán has been an active Trade Unionist since 2001 when he first became a school rep and has held elected positions both locally, regionally and nationally. Seán has been an active caseworker for over 10 years.