Unions continue pensions negotiations


Teachers have until October to have their say on plans that will see them paying more money into their pensions from April 2012. As part of wider public sector


pension reforms, the government has pledged to increase employee contributions by 50 per cent on average over three years – from 6.4 per cent to 9.6 per cent by 2015. The government is still locked


in talks with public sector unions over the wider pension plans, but has launched a series of consultations to ask the workforce about the first round of increased contributions for 2012/13. Ministers have already pledged


that workers earning less than £15,000 a year will see no increase, while those earning between £15,000 and £21,000 will only see a 0.6 per cent increase in 2012/13. However, in the consultation


over the Teachers’ Pension Scheme, the Department for Education is considering extending the 0.6 per cent threshold to £26,000. Unde r the propos a l s ,


headteachers earning £100,000 will make an 8.4 per cent contribution (up two per cent) into their pension from April. This equates to an extra £1,206 a year after tax. A classroom teacher earning


£25,700 a year will make a seven per cent contribution (up 0.6 per cent). This equates to an extra £122 a year after tax. An experienced classroom


teacher earning £35,000 a year will make a 7.6 per cent contribution (up 1.2 per cent). This equates to an extra £420 a year after tax. The government says it is still negotiating with unions over


the increased contributions for 2013/14 and 2014/15, however, it has committed to its plans to push through the 3.2 per cent increase to employee contributions by the end of this period. It says that separate consultations


will take place next year on contri- butions for 2013/14 and 2014/15. Danny Alexander, chief secre-


tary to the Treasury, said: “The government remains committed to securing the full Spending Review savings of £2.3 billion in 2013/14 and £2.8 billion in 2014/15, requiring each scheme to find sav- ings equivalent to a 3.2 percentage point increase in member contri- butions. Separate scheme-specific discussions will make proposals by the end of October on how these savings are achieved.” Schools minister, Nick Gibb,


added: “Pensions are an important part of a teacher’s remuneration package and ministers are clear that a defined pension scheme will be maintained along with the pensions they have already earned so none of the rights people have accrued will be affected. And the Teachers’ Pension Scheme will remain one of the very best available in the public sector.” The plans to increase


contributions by 50 per cent come on top of wider pension changes recommended by Lord Hutton’s review of public sector pensions earlier this year. The government has adopted


the report’s recommendations and proposes to link the normal pension age to the state pension age, which is 65 but set to rise to 66 in 2020 and then to 68. It is also set to scrap the teachers’ final


salary pension link – linking them instead to career average earnings. These proposals come on top of a


change to the inflation link for public sector pensions from the Retail Price Index to the lower Consumer Price Index, which will devalue pensions by up to 15 per cent.


Unions continue to oppose the


plans. A day of strike action took place in June and a number of education unions have threatened further action if the ongoing negotiations break down. To have your say, visit www. education.gov.uk/consultations/


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