Ask the panel

November 25, 2005

I am about to join a new university as an hourly paid lecturer teaching for three hours a week. I am close to retirement and do not see this as a first step towards some sort of academic career. The university says I have automatic membership of the Teachers' Pension Scheme, but I have been advised that I would be better off claiming pension credits. Do I have to join the TPS or should I claim the credit?

Pensions are a complicated area, and when the Pensions Act and Finance Act come into force next April, the situation is set to become more complicated still. Academics in old universities are in the Universities Superannuation Scheme while academics in new universities are in the Teachers' Pension Scheme. There are already differences between the two schemes and as of April the two are set to diverge further.

The USS is well ahead in planning for the changes whereas the TPS is still making key decisions. Many of these decisions will reflect the needs of teachers - who make up the bulk of TPS membership - rather than of academics.

In the meantime, hourly paid workers face a series of difficult decisions about whether to join the scheme. New universities employ large numbers of hourly paid workers, often to boost teaching in professional areas. Your dilemma is not unique.

* Our panellist from the Association of University Teachers says: "As an hourly paid teacher, membership of the Teachers Pension Scheme is on an opt-in basis and you are required to complete form 261 with the scheme accepting that the post is pensionable."

She adds: "Under the rules of the scheme, if you are within two years of retirement you would not qualify for benefits, so joining would be a pointless exercise except for the death-in-service cover. If the period is longer than two years, the accrued service is based on time actually worked, ie, three hours a week for say 32 weeks each year equates to 90 hours a year and not the eight months of the contract, therefore any benefits will be very small.

"If you decide, having taken financial advice, not to join the TPS, then ask your employer to add their 13.5 per cent saving on pension contributions on to your salary."

* Our panellist from lecturers' union Natfhe says: "If you worked very few hours then your pay would be low and so would your pension build.

Although you say you are close to retirement age, unforeseen circumstances may arise that could make continuation of work a necessity. If there is any possibility you may need to work beyond the two years needed to qualify for pension benefits, and of increasing your hours, you will need to weigh up your options. Any pension credit would be affected by the occupational pension."

He says that should you need to work beyond two years, you will need to join the pension scheme sooner rather than later.

"The Government is about to put the retirement age for the TPS up from 60 to 65," he says. "They backed down on doing it for existing members but the new rules will apply to all new members - no matter what age they are. So if you decide to join you would be advised not to delay doing so."

He says that individuals can insert their details into a calculator on the pension credit website ( ) and see the effect.

He adds: "If you decide not to join the TPS, you will benefit from adding the employer's saving on their contribution to your pension."

* Our panellist from the Universities and Colleges Employers' Association says: "The university is not in a position to give you financial advice and you don't 'have' to join the TPS. It is important that you take your own independent financial advice before making a decision because it is your choice and your future. Remember that you will need to complete relevant forms to join, or inform the university in writing at the beginning of your employment if you decide against TPS membership."

This advice panel includes the Association of University Teachers, Natfhe, the Universities and Colleges Employers' Association, Research Councils UK, the Equality Challenge Unit and Rachel Flecker, an academic who sits on Bristol University's contract research working party.

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