Pension Schemes - Frequently Asked Questions
Member Eligibility
- Personal Pension Schemes
- Public Sector Schemes
Personal Pension Schemes
Q. I have moved overseas. Am I still eligible to
contribute to my personal pension scheme.
A. There are some situations where this may be possible. This is explained in more detail in Part 3 of the IR76(2000) which is also available on the Internet.
Public Sector Schemes
Q. I am a teacher at a school which participates in the Teachers Pension Scheme (TPS). I am going to work for a private school/private sector employer which does not participate in the scheme. Can I carry on contributing to the TPS?
A. Yes. A facility exists in the scheme called Current Added Years.
This allows teachers to leave the job they were pensioning but remain
in the TPS for a limited period. To take advantage of the facility, teachers
must pay their own and their employers contributions for the period concerned,
based on notional teaching earnings i.e. earnings they would have received
if they had carried on in the job. It is possible to have a personal pension
in respect of any new earnings but the combined contributions must stop
immediately if the individual joins their new employer's occupational
scheme.
As far as tax relief is concerned, in the vast majority of cases relief
can be allowed only in a year where there are actual (not notional) earnings
from the job being pensioned. Relief is restricted to 15% of the actual
remuneration received in that year from the employment being pensioned.
It follows that no relief can be given if contributions are paid during
a tax year when no remuneration is actually received from that source.
Notional earnings are not actual earnings so they do not count and similarly
the salary received from the new job is irrelevant in this context as
it is not the job being pensioned.
A similar facility that exists is the Universities Superannuation Scheme
(USS). As in the TPS contributions are paid on a notional salary level
which would have been received had the individual not left. But unlike
the TPS members of the USS only have to pay their own contributions and
the only restriction on tax relief is that it is limited to 15% of earnings
from their current employer.
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