All active teachers now in career average scheme

The final salary section of the Teachers' Pension Scheme closed to new contributions on 31 March 2022, and since 1 April 2022 all active members build up their pension benefits in the career average scheme¹. The scheme's administrator, Teachers' Pensions, states that any benefits already built up in the final salary scheme are retained in that scheme².

The career average scheme was introduced in April 2015, when new starters joined it automatically and existing members began to transition across². Until 2015 the scheme was a final salary scheme, based on a teacher's salary when they left teaching, and most teachers were moved to the career average arrangement at that point, though some older members were able to remain in the final salary scheme for a further seven years³.

The change forms the first part of the remedy for unlawful discrimination in public service pension schemes. Transitional protection had allowed members within ten years of their normal retirement age to stay in their final salary schemes while others moved to career average schemes in or after 2015⁴. The Court of Appeal ruled in December 2018 that this protection in the judges' and firefighters' schemes gave rise to unlawful discrimination, and in July 2019 the government confirmed the judgment had implications for all the main public service schemes, including teachers⁴. The Public Service Pensions and Judicial Offices Act 2022 set out that from 1 April 2022 all those in service in the main unfunded public service pension schemes, including the Teachers' Pension Scheme, would be members of the career average schemes⁴.

The second part addresses the different treatment of members between 1 April 2015 and 31 March 2022, known as the remedy period, and was implemented from 1 October 2023⁴. Members who were moved to the career average scheme in 2015, or later if they had tapered protection, were moved back into the final salary scheme for the remedy period¹. Affected members will choose between final salary and career average benefits for that service when they take their pension benefits, under what is called the Deferred Choice Underpin¹. The NHS Business Services Authority, which administers the NHS scheme, describes the same two-part process, saying the first part was completed in 2022 with all active members then in the 2015 scheme⁶.

Source: Which?³

Why it matters for households

Teachers who were still building up final salary benefits had those benefits closed to further accrual on 31 March 2022, so pension earned from 1 April 2022 is based on average earnings across a career rather than on salary at leaving³. Which? describes the 2015 career average section of the NHS scheme as less generous than the final salary scheme³. Benefits already built up in the final salary scheme are protected and retained in that scheme³.

The section a teacher's benefits sit in affects when they reach normal pension age and their family pension benefits². For teachers who joined before 1 January 2007 the normal pension age is 60, and for those who joined after that date it is 65³. Which? also reports that members can retire early and claim from the minimum pension age of 55, with benefits reduced to reflect earlier payment³.

Contribution rates for 2026-27 in the Teachers' Pension Scheme range from 7.4% on salary up to £36,199 to 12% on salary above £104,414, according to Which?³. Those rates are reported as dated figures and are separate from the 2022 change of scheme section.

What happens next

Affected members will be asked, after they retire, whether they want legacy scheme or reform scheme benefits for their service during the remedy period⁶. Teachers' Pensions says the choice is made at the time benefits are taken, and that members who have already taken benefits from the final salary scheme will be given the choice for service between 1 April 2015 and the date they take their pension, with any change backdated¹. Former protected members who joined the career average scheme from 1 April 2022 could transfer in service from other registered pension schemes between 1 April 2022 and 31 March 2023, and former unprotected and tapered members could transfer in between 1 October 2023 and 30 September 2024⁷.