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Welcome to our blog post all about the Teesside Pension Fund! Whether you’re just starting your career or nearing retirement, understanding your pension options is crucial for securing a comfortable future. In this article, we’ll delve into the ins and outs of the Teesside Pension Fund, including its contribution rates and how it can benefit you. So grab a cup of tea, sit back, and let’s explore everything you need to know about this essential financial resource. Let’s get started!
What is the Teesside Pension Fund?
The Teesside Pension Fund is a local government pension scheme in the United Kingdom. It provides retirement benefits to employees of local authorities, educational institutions, and other participating employers in the Teesside region. The fund is administered by the Teesside Pension Fund Committee, which oversees its investments and ensures the efficient operation of the scheme.
The scheme was established under the provisions of the Local Government Pension Scheme (LGPS) Regulations 2013. It is a defined benefit scheme, which means that members are entitled to a specific level of pension based on their length of service and earnings. The fund’s investment strategy aims to generate returns that can support the payment of these pensions while managing risks appropriately.
The Teesside Pension Fund is one of many such funds across the United Kingdom, collectively managing billions of pounds in assets. These funds play a crucial role in providing financial security for local government and public sector workers during their retirement years.
Who is Eligible for the Teesside Pension Fund?
The Teesside Pension Fund is open to a range of public sector workers in the Teesside region. Eligibility for membership in the fund is determined by the Local Government Pension Scheme (LGPS) Regulations 2013 and subsequent amendments. Generally, the following individuals may be eligible to join the Teesside Pension Fund:
- Employees of local authorities: This includes individuals employed by local government bodies such as council employees, fire and rescue personnel, and school support staff.
- Educational institution employees: Teachers, teaching assistants, and non-teaching staff working in schools and academies within the Teesside area may also be eligible.
- Certain contractors: Individuals who provide services under a contract of employment with a participating employer may also be entitled to join the fund, subject to specific criteria.
It’s important to note that eligibility criteria can vary, and it’s always advisable to consult with your employer or the Teesside Pension Fund directly to determine your specific eligibility.
Teesside Pension Fund Contribution Rates
The contribution rates for the Teesside Pension Fund are set by the Local Government Pension Scheme (LGPS) Regulations and may vary depending on factors such as your salary and pensionable earnings. The following are general guidelines regarding contribution rates:
- Employee contributions: As a member of the Teesside Pension Fund, you are required to make regular contributions from your salary towards your pension. The contribution rates are based on a percentage of your pensionable earnings. The rates are usually tiered, meaning that different levels of earnings correspond to different contribution rates.
- Employer contributions: In addition to employee contributions, your employer is also required to contribute to the Teesside Pension Fund on your behalf. Employer contribution rates are determined by the LGPS regulations and are designed to help fund the benefits provided by the scheme.
| Band | Actual Pensionable Pay for an Employment | Main Section Contribution Rate for that Employment | 50/50 Section Contribution Rate for that Employment |
| 1 | Up to £16,500 | 5.50% | 2.75% |
| 2 | £16,501 to £25,900 | 5.80% | 2.90% |
| 3 | £25,901 to £42,100 | 6.50% | 3.25% |
| 4 | £42,101 to £53,300 | 6.80% | 3.40% |
| 5 | £53,301 to £70,800 | 8.50% | 4.25% |
| 6 | £70,801 to £102,100 | 9.90% | 4.95% |
| 7 | £102,101 to £123,500 | 10.50% | 5.25% |
| 8 | £123,501 to £187,000 | 11.40% | 5.70% |
| 9 | £187,001 or more | 12.50% | 6.25% |
It’s worth noting that the contribution rates for the Teesside Pension Fund, as well as for other local government pension schemes in the UK, can be subject to periodic reviews and adjustments.
What Are the Different Contribution Bands in Teesside Pension Fund?
The Teesside Pension Fund, like other local government pension schemes in the United Kingdom, has different contribution bands based on earnings. These bands determine the percentage of your pensionable earnings that you and your employer contribute to the fund. The specific contribution bands for the Teesside Pension Fund may vary slightly depending on the regulations in force at the time, but as of now, the bands are generally structured as follows:
1. Lower Earnings Band:
- This band applies to the portion of your pensionable earnings up to a certain threshold.
- Band 1 to 3
- The employee contribution rate is typically lower within this band than in higher bands.
- The employer contribution rate is also lower within this band.
2. Middle Earnings Band:
- This band applies to the portion of your pensionable earnings above the lower earnings band threshold.
- Band 4 to 6
- The employee contribution rate within this band is higher than in the lower earnings band.
- The employer contribution rate within this band is also higher.
3. Higher Earnings Band:
- This band applies to the portion of your pensionable earnings above the middle earnings band threshold.
- Band 7 to 9
- The employee and employer contribution rates within this band are typically the highest.
The specific earnings thresholds and contribution rates within each band may change over time due to various factors such as government legislation and pension scheme reforms.
How Often Do My Teesside Pension Fund Contributions Change?
The Teesside Pension Fund contributions can change periodically due to various factors such as government legislation, pension scheme reforms, and annual reviews. The contribution rates for the Teesside Pension Fund are reviewed every three years. The next valuation will be conducted in 2026, and any changes to contribution rates will take effect from 1 April 2027. The outcome of the valuation will determine whether contribution rates need to be adjusted to ensure the long-term sustainability of the fund.
Here are some common occasions when your Teesside Pension Fund contributions might change:
- Scheduled reviews: Pension schemes, including the Teesside Pension Fund, often undergo periodic reviews to reassess funding requirements and sustainability. These reviews can result in changes to contribution rates or bands.
- Changes in legislation: Government legislation relating to pensions and retirement benefits can impact contribution rates and structures. Any changes in the law can lead to adjustments in the Teesside Pension Fund contributions.
- Annual updates: Each year, the Teesside Pension Fund, like other local government pension schemes in the UK, carries out an update process to ensure accurate member records and proper calculations of pensionable earnings. This process may also involve reviewing and adjusting contribution rates.
It’s important to stay informed about any changes to the Teesside Pension Fund contributions by regularly checking the communications from your employer or contacting the Teesside Pension Fund directly. They will provide you with the most up-to-date information regarding any changes to your contribution rates and keep you informed about how they will affect your pension benefits.
How Are My Teesside Pension Fund Contributions Invested?
The Teesside Pension Fund invests the contributions it receives from members and employers to generate returns that can fund the payment of pensions and other benefits. The specific investment strategy for the Teesside Pension Fund is determined by the Teesside Pension Fund Committee, which is responsible for overseeing the fund’s investments. The current asset allocation of the Teesside Pension Fund is as follows:
- Equities: 40%
- Bonds: 35%
- Property: 15%
- Other: 10%
The investment approach of the Teesside Pension Fund is typically focused on achieving a balance between generating returns and managing risks.
What Happens to My Teesside Pension When I Retire?
When you retire from the Teesside Pension Fund, your accumulated pension benefits are used to provide you with a retirement income. The Teesside Pension Fund offers a defined benefit scheme, which means that your pension is based on a formula that takes into account your length of service and earnings.
Upon retirement, you have several options regarding how you receive your Teesside Pension Fund benefits:
- Scheme pension: You can choose to receive a regular income, known as a scheme pension, for the rest of your life. This pension is typically paid monthly and is based on the formula outlined in the scheme rules.
- Commutation: You may have the option to exchange part of your pension for a tax-free lump sum payment at the time of retirement. The amount you can commute depends on the rules of the scheme and any restrictions in place at the time.
- Flexible retirement: Some pension schemes, including the Teesside Pension Fund, may allow for flexible retirement arrangements. This means that you may be able to access some of your pension benefits while continuing to work.
Additionally, it’s worth noting that there may be additional provisions in the scheme for factors such as early retirement, ill-health retirement, and death benefits to provide financial security for you and your loved ones under various circumstances.
How to Withdraw From Teesside Pension Fund?
Withdrawing from the Teesside Pension Fund typically occurs when you retire and are ready to access your pension benefits. The process of withdrawing from the fund involves several steps, which may include the following:
- Retirement notification: Notify your employer or the Teesside Pension Fund in advance of your intended retirement date. This allows them to initiate the necessary paperwork and processes for your pension withdrawal.
- Pension options: Discuss your pension options with the Teesside Pension Fund or a financial advisor. They can provide guidance on the various choices available to you, such as taking a scheme pension, commuting part of your pension for a lump sum, or exploring flexible retirement options.
- Application form: Complete the relevant application forms provided by the Teesside Pension Fund. These forms will typically require information about your personal details, retirement date, chosen pension option, and any additional documentation required.
- Calculation and confirmation: The Teesside Pension Fund will calculate the amount of your pension based on your accrued benefits, salary, and length of service. Once the calculation is complete, they will confirm the details of your pension entitlement and the payment schedule.
- Pension payment: At the agreed retirement date, the Teesside Pension Fund will start making pension payments to you according to your chosen payment frequency (usually monthly). If you have elected to receive a tax-free lump sum, this will also be paid out at this time.
It’s important to note that the withdrawal process from the Teesside Pension Fund may differ based on individual circumstances, scheme rules, and any specific provisions in place.
Is the Pension Fund Increase in Teesside in 2023?
Yes, the Teesside Pension Fund increased by 10.1% in 2023. This increase was applied from April 10, 2023. The increase was in line with the September-to-September adjustment in the Consumer Price Index (CPI). The CPI is a measure of inflation in the UK. The increase was necessary to ensure that the pension fund could continue to pay members a decent pension in retirement.
The Teesside Pension Fund is a Local Government Pension Scheme (LGPS) that provides retirement benefits to eligible employees of participating employers.
Conclusion
The Teesside Pension Fund is a Local Government Pension Scheme (LGPS) that provides retirement benefits to eligible employees of participating employers. The contribution rates for the Teesside Pension Fund are determined based on the employee’s pensionable earnings and fall into nine bands. The current contribution rates range from 5.50% to 12.50% for the main section and from 2.75% to 6.25% for the 50/50 section.
The contribution rates for the Teesside Pension Fund are reviewed every three years. The next valuation will be conducted in 2026, and any changes to contribution rates will take effect from 1 April 2027. The outcome of the valuation will determine whether contribution rates need to be adjusted to ensure the long-term sustainability of the fund.
