Guide to the Teachers’ Pension Scheme
Pensions can be complicated at the best of times, and the Teachers’ Pension Scheme is no exception. Get detailed information on the scheme.
What happens if you die while in active employment?
Though it’s not nice to think about, it can be reassuring to know that there's a ‘death grant’ issued if you die during active employment. Your beneficiaries may also be entitled to a long-term pension.
- For career average members, the death grant is worth three times your full-time salary and a long-term pension to the value of 37.5% of the pension you’ve earned up to your date of death.
- For final salary members, the death grant is worth three times your final average salary and 1/160 of the final average salary for each year of your survivor benefits service.
Who gets the grant?
If you die in service*, your surviving spouse or civil partner will automatically be given your death grant. That’s unless you’ve made a death grant nomination to someone else.
You can choose a beneficiary of any age and relationship to you. Bear in mind that you can’t nominate a charity or trust. If there’s no adult beneficiary or death grant nomination at the time of your death, your death grant will be paid to your estate.
After your death, your beneficiary will receive a ‘short term pension’ which is a payment equivalent to three month’s salary. After these three months, they’ll receive a ‘long term pension’, with the value depending on the type of pension membership you held.
*As long as you are receiving at least half of your usual gross salary, you will be classed as being in pensionable service. If you die within 12 months of leaving pensionable service, the in-service death grant still applies. Once 12 months have passed, the out-of-service death grant applies.
What happens if you die while collecting your Teachers’ pension?
If you’ve been collecting your pension for five years or less, the ‘discretionary death grant’ applies. This is worth five times your annual income at the date of your death less any pension payments you’ve already received.
If you die while collecting your Teachers’ Pension, your spouse or civil partner will receive your full pension for three months. After this, they'll be entitled to a reduced-rate income until they die.
- For career average members, your partner will receive 37.5% of the pension you’ve accrued up to the date of your death.
- For final salary members, your partner will get 1/160th of your final average salary for each year of service. For example, if your final salary is £35,000 and you have a service of 30 years, they’d receive £35,000 x 30 / 160 = £6,562.50 annually.
If you have benefits in both career average and final salary, two calculations will be made, and these will be paid together.
What happens if you die after leaving the scheme, but you’ve not reached pension age?
If you’ve completed two or more years of pensionable service, a death grant can be issued. How much you’ll get depends on which pension arrangement you were in when you left service.
- For career average members, the death grant is either your accrued pension multiplied by 2.25, or your pension contributions plus interest of 3% if there’s no adult pension payable.
- For final salary members, the death grant is either your retirement lump sum at your date of death, or your pension contributions plus interest of 3% if there isn’t an adult pension payable.
If you die while collecting your Teachers’ Pension, your spouse or civil partner will receive:
37.5% of the pension you’ve accrued up to the date of your death if you were a career average member.
1/160th of your final average salary for each year of service if you were a final salary member. For example, if your final salary is £35,000 and you have a service of 30 years, they’d receive £35,000 x 30 / 160 = £6,562.50 annually.
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