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Scottish Borders Local Association
 

Retiring Early?

...or is it just a dream...;-)

Other than the 'normal' methods of early retirement, there are other options available to you. There is, for example, the possibility of pursuing the winding down scheme...

Alternatively, access to an actuarially reduced pension and lump sum is now available to teachers aged between 55 and 59. This is an entirely voluntary form of retirement and any decision about taking actuarially reduced benefits is a matter for the individual teacher. However, it is open to the employer to withhold consent for a maximum period of six months. It must, however, be remembered that, although the reduced pension and lump sum will be subject to index linked increases, the reduction is, in itself, permanent.

The tables below outline the factors which will be applied to both pension and lump sum and show the fraction of the pension/lump sum which will be provided by the scheme.

PENSIONS:

 

Complete Months

Complete
Years
Age

0

1

2

3

4

5

6

7

8

9

10

11

55
56
57
58
59

0.742
0.786
0.833
0.884
0.940

0.746
0.790
0.837
0.889
0.945

0.750
0.794
0.842
0.893
0.950

0.753
0.798
0.846
0.898
0.955

0.757
0.802
0.850
0.903
0.960

0.761
0.806
0.854
0.907
0.965

0.764
0.810
0.859
0.912
0.970

0.768
0.813
0.863
0.917
0.975

0.771
0.817
0.867
0.921
0.980

0.775
0.821
0.871
0.926
0.985

0.779
0.825
0.876
0.930
0.990

0.782
0.829
0.880
0.935
0.995

LUMP SUM:

 

Complete Months

Complete
Years
Age

0

1

2

3

4

5

6

7

8

9

10

11

55
56
57
58
59

0.843
0.872
0.902
0.934
0.966

0.845
0.875
0.905
0.936
0.969

0.848
0.877
0.907
0.939
0.972

0.850
0.880
0.910
0.942
0.975

0.853
0.882
0.913
0.944
0.977

0.855
0.885
0.915
0.947
0.980

0.857
0.887
0.918
0.950
0.983

0.860
0.890
0.921
0.953
0.986

0.862
0.892
0.923
0.955
0.989

0.865
0.895
0.926
0.958
0.992

0.867
0.897
0.928
0.961
0.994

0.870
0.900
0.931
0.963
0.997

 

For example, if you stop work at age 55 years and 4 months your pension will be 75.7% of the level it would have been if your employer had granted you early retirement without any enhancement and your lump sum would be 85.3% of the amount to which you would be entitled had you got early retirement with no enhancement.

You are strongly advised to seek independent financial advice before making any decisions about taking an actuarially reduced pension.
 

Winding Down Scheme

This scheme is available to teachers who are 56 or over and have at least 25 years of teaching service, the last 10 of which must have been full-time. The winding down employment must be a part-time post of 0.5 or more and, at the conclusion of the winding down period, each year of part-time service will count as a year of full-time service pensionable service. However, pension contributions will be based on the actual salary received during the part-time period.

The final pensionable salary at retirement will be based on the salary received in the year prior to entering winding down employment but uprated using the Retail Price Index figures up to the actual date of retirement.

Any member interested in applying to join the winding down scheme should write to his/her employing authority in the first instance using form Winding Down 2 Part A. The final decision on whether to allow entry to a "winding down" position rests with the employing authority; in other words, it is a possibility rather than an entitlement.

You are strongly advised to seek independent financial advice before making any decision about winding down.
 

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