NEWS • VIEWS • INFORMATION • ADVICE
Protecting teachers’ Pensions
Teachers’ pensions, along with those of other public sector workers, have come under relentless attack from the Coalition Government.
Ministers have been supported by the media and business leaders in making spurious and inaccurate claims that public sector pensions are ‘gold-plated’, ‘unaffordable’ and ‘a burden on the public purse’. As a result, the Government has brought forward proposals for sweeping changes that will devalue public sector pensions and leave hard-working public servants worse off, both now and in retirement.
The Coalition Government is seeking to:
• Increase employee contributions by up to 50%, a move which would take contribution rates from the current level of 6.4% to 9.8% by 2014/15;
• Align the public sector pension age to the new state pension age of 66;
• Abolish the final salary scheme and introduce a career average scheme.
It has already:
• Changed the index used to calculate pension accrual from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). The NASUWT has calculated that the average teacher stands to lose £50,000 of their pension over 20 years as a result of this change which was imposed without consultation.
NB. At the moment the proposals relate to the reform of public service pensions in England and Wales, but if implemented the same changes would follow in Scotland and Northern Ireland.
Teachers’ pensions – the benefits
Despite the threat posed by the Coalition’s proposals, the NASUWT would urge members not to consider pre-emptive action by opting out of the scheme.
The schemes currently provide a range of benefits, including:
• a substantial contribution from your employer towards the cost of your pension;
• a lump-sum payment, equivalent to three times your pensionable salary, if you die in pensionable employment;
• a survivor’s pension for your widow, widower, civil partner, nominated partner, children or other dependants after you die;
• an immediate ill-health retirement pension if you are permanently too ill to teach;
• an option to increase your pension by buying additional benefits;
• an automatic lump sum on retirement of three times your annual pension or, if you joined the scheme as a post-2007 entrant, you can choose to have part of your pension paid as a lump sum;
• an option to ‘phase’ your retirement without a break in service by taking part of your accrued pension benefits while continuing to teach;
• increases to your pension, and that of your widow, widower, partner or dependants, to protect it against the effects of inflation.
The NASUWT has been working through the TUC to challenge the Coalition’s pension reforms. The Union is part of the TUC negotiating team on pensions, which has been meeting with Government ministers to seek a halt to the plans.
All the proposed changes are on the table for discussion and the negotiating team has scheduled a number of meetings with ministers with the aim of concluding the talks before the end of the school year. The NASUWT is completely committed to taking all steps to protect teachers’ pensions but believes it is critically important to first exhaust the opportunities for negotiation with Government on changing the proposals. It is also clear that parents and the wider public expect unions to do everything possible to seek to secure a negotiated resolution to the dispute. Rushing to industrial action would allow the Coalition to brand the unions as unreasonable. The NASUWT does not wish to hand minister s such a propaganda opportunity. Furthermore, there is nothing to be lost in seeking a resolution through negotiation with ministers.
Even if the talks break down without a successful conclusion, the earliest the Government could seek to introduce the changes would be April 2012, due to the legal process necessary to amend the pension schemes.
There is, therefore, no need to rush to industrial action. Sustained and co-ordinated action by all public sector unions in the Autumn term will have more impact.
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