What happens if you return to teaching after retiring?
You must inform us in writing immediately if you become re-employed as a teacher, confirming your start date and details of your employer. This will help ensure you aren't overpaid pension at any time.
When you return to work, you’ll automatically be re-entered into the pension scheme. You will need to ensure that you do not exceed your earnings limit (information on this will have been issued with your awarding paperwork). Please note your earnings limit will still apply to any period of re-employment irrespective if you re-join the pension scheme or not.
If you wish, you can opt out of the scheme and stop paying contributions at any time by completing the opt out form.
Breaks in employment
Members who are re-employed after taking their pension benefits must have a break of at least one working day. It must be shown that it was a clear intention on the part of the member to retire. You must terminate your employment contract and cannot opt out to generate your 24 hour break.
Failure to take this break will result in your pension being stopped and any pension and lump sum already paid will be recovered.
Rejoining the scheme
If you returned to work after retirement before 1 April 2012, you'll continue to be protected under your previous scheme arrangements.
If you returned to work after retirement between 2 April 2012 and 31 March 2015, you'll accrue mixed benefits from 1 April 2015. Your previous scheme arrangements will be protected up to 31 March 2015 while benefits accrued after 1 April 2015 will fall under the Scottish Teachers' Pension Scheme 2015.
If you return to work after retirement from 1 April 2015, you will automatically join the Scottish Teachers' Pension Scheme 2015.
Earnings limits
Scottish Teachers' Superannuation Scheme
If you retired because you reached your normal pension age or took premature retirement, an earnings limit will apply whether your re-employment is pensionable or not. If you exceed your earnings limit, your current pension may be reduced or temporarily suspended.
If you're currently on phased retirement you won't be subject to an earnings limit but when you take your final benefits after phased retirement, an earnings limit will apply.
If you retired on an actuarially reduced pension your pension will not be affected. If you return to work and then take normal pension age, premature or Ill health retirement your benefits may then be affected.
Scottish Teachers' Pension Scheme
If you're receiving a pension from the STPS, your pension will not be affected by any re-employment.
Calculating your earnings limit
In the Scottish Teachers' Superannuation Scheme, your pension will be affected if your pension and re-employed earnings exceed your 'salary of reference'. Your salary of reference is the highest pensionable earnings in the period used in the calculation of your benefits. Your salary of reference is indexed linked each year in line with inflation.
Your index-linked salary of reference minus your annual pension is the limit you can earn in a tax year before your pension is affected. Any compensation (mandatory and discretionary) being paid by your employer is also deducted.
Example
A teacher retires on salary of reference of £35,000 and receives an annual pension of £10,000 a year from SPPA and £2,000 a year from their employer.
Salary of Reference = £35,000.
Total annual pension received = £12,000
Earnings limit = £23,000
If your earnings from re-employment exceed your earnings limit, you should inform us immediately as you may have been overpaid pension which will have to be recovered.
The earnings limit covers the period 1 April to 31 March each year. If you return to work in the same financial year as you retired and your retirement date is after 1 April, only a proportion of the earnings limit would be applicable for that first year.
In order to calculate the limit for the first year, divide the earnings limit figure by 365, and then multiply by the number of days from the first date of re-employment to the following 31 March.
If you're subject to an earnings limit you should have received the calculation of your limit, along with your award documentation when you retired. You can contact us if you need to request an earnings limit.
Monitoring earnings
It's in your own interest to monitor your earnings and to notify us if you're approaching your earnings limit. Your employer will supply us with details of your earnings at the tax year end and we're obliged to recover all overpayments. The easiest way to check your earnings in any tax year is to look at Your Earnings to Date plus contributions paid in your payslip.
If we know you're re-employed we'll contact you annually with an updated earnings limit, for as long as you're re-employed. If your circumstances change within that time, please contact us.
Ill health
If you're in receipt of an ill health pension it's because you've been deemed permanently medically unfit to teach. So, if you are considering returning to work, you should contact us in writing immediately. If you wish to return to teaching, your employer must be satisfied that you're fit to teach. Your pension may be revised or stopped if:
- You're receiving total incapacity benefits and you take up further employment. This would cause your enhancement to stop immediately. If you want your enhancement to continue after taking up employment, you must provide acceptable medical evidence that you still meet the conditions for your enhancement.
- You're receiving partial incapacity benefits and you take up employment as a teacher or in another education capacity covered by the scheme.
- You began receiving ill health retirement benefits before 1 April 2007 and you return to full or part time teaching employment prior to turning age 60. This includes short periods of supply teaching.
If your pension is stopped because you return to work, it will only be paid again if you become ill again and satisfy the medical advisor that you're unfit to teach otherwise you can retire on any other grounds at the appropriate age.
Refund of contributions in re-employment
If you decide you don't want to make any further pension contributions you must submit your opt out form within three months of commencing re-employment. This 'opt out period' starts as soon as you've been enrolled into the scheme. Your employer is responsible for ensuring you're made aware of your opt out period. If contributions have been deducted from your salary, your employer will refund these directly to you. No service will have been accrued for the period of the refund and you'll be treated as though you had never re-joined.
Short service annuities and second pensions
If you pay contributions for less than one calendar year you'll receive a short service annuity and if you pay contributions for more than one calendar year you'll receive a second pension.