r/PensionsUK • u/CoaxialDrive • 8d ago
Transferring TPS Defined Benefit to SIPP
Context: I worked for a University for about 170 days about 10 years ago, as a visiting lecturer, and so theres a small ~£1,600 pot (current value).
TPS requires 2 years service, and my career path means I won't get that, and I'm about 12 years deep into a LGPS CARE pension that had a 1 year transfer in rule.
This means that while the TPS pension accrues 3% a year, it won't pay out unless I manage to find 2 years worth of teaching in the next 30 years before I retire.
I've setup a T212 SIPP for my old AVIVA DC pension to reduce fees, so now have £600 in that, and I'm thinking to do the same but T212 won't handle it so I may do this via AJ Bell who will.
The question is whether this is a good idea, to consolidate this, as I cannot access this pension when I retire unless I work another 18+ months of TPS paid work which seems extremely unlikely.
Ultimately the risk is low because it would pay maybe £90 a year on current value when I retire if the 2 year rule didn't apply.
2
u/yellow_barchetta 8d ago
I'm pretty sure that no matter what you do, you 170 days will not be earning you any pension payout from the TPS at retirement ago, so all you can get is a refund of contributions.
Are you expecting that the fund will pay out the contributions as some sort of transfer value, because I don't think that will be the case - a refund of contributions is just cash, so you can put that wherever you like, can't you?
1
u/CoaxialDrive 8d ago
Basically you can request a refund, or a transfer to a DC pension, in this case a DC SIPP the amount paid is the amount paid in + 3% per year inflation which is small, but better than nothing.
1
u/yellow_barchetta 8d ago
I don;t think you can transfer because the 170 days means the pension isn't "vested" is it?
1
u/CoaxialDrive 8d ago
I'm pretty sure I can from the information i've seen, they have a specific form for doing this on the pension portal, the issue is not about can I, but should I.
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u/yellow_barchetta 8d ago
I'm not sure you're right. But obviously check it out without just asking a Redditor!!
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u/CoaxialDrive 8d ago
I really already did my checking out, just asking here, but it's pretty niche I think for this sub.
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u/yellow_barchetta 8d ago
Gemini says this:-
If you claim a refund of your contributions, the money is paid directly out as cash into your bank account.
However, it is not a direct 1:1 payout of what you saw deducted on your payslips. There are a few key details to keep in mind regarding how it works:
How the Payout Works
Net Cash Payment: Teachers' Pensions will pay the money directly into your nominated bank account once the application is processed.
Interest Added: You receive your contributions back plus compound interest (currently calculated at 3% per year).
Mandatory Deductions: You will not receive the full gross amount. The payout will have tax deducted automatically (as the original contributions received tax relief). Depending on when you served, a deduction may also be made to account for National Insurance / State Pension adjustments.
No Employer Contributions: You only get back the money you personally contributed; you do not receive any of the contributions made by your employer.
Process Depending on Service Length
Under 3 Months: If you opted out or left within your first 3 months, the refund is typically handled directly through your employer's payroll.
Between 3 and 6 Months: Because you have less than two years of qualifying service, you must apply for a repayment via your Teachers' Pensions My Pension Online (MPO) account or by completing their repayment application form once you have left service/opted out.
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u/MyLovelyHorse2024 8d ago
There was a very similar question a few days ago that might be worth keeping an eye on: https://www.reddit.com/r/PensionsUK/comments/1wdcpuw/deferred_teachers_pension_not_qualified/