Planning for retirement – the school’s perspective Comment by SIMON HENTHORN, Head of Education at Workplace Lawyers Doyle Clayton

The data According to latest Government statistics, nearly one in five full time equivalent teachers in state schools are over the age of 50. Now that there is no official retirement age, any school which requires a teacher to retire at a particular age will be discriminating unlawfully on grounds of age, unless it can justify its actions. The latest figures show a downward trend in the number of teachers retiring year on year. 15,760 teachers retired in 2014-15, compared to 17,130 in 2013- 14 and 20,600 in 2011-12. In addition, the percentage of teachers retiring early due to ill health is falling dramatically, down from 25 per cent in the 1990s to just three percent in 2014-15.

The issue The combination of an ageing population, no compulsory retirement age and the increasing good health of teachers is contributing an ageing teaching population. Whilst some schools are managing this, others are finding it more challenging. Worryingly, some schools are unwittingly flouting employment laws and could find themselves in an Employment Tribunal facing an age discrimination claim. It is important to be aware that asking a teacher

about their retirement plans can amount to less favourable treatment and result in a claim for direct age discrimination. Repeated questions of this nature could also amount to harassment. Nevertheless, schools clearly need this information for workforce planning purposes. Whilst many teachers will be looking forward to retirement and will be happy to discuss their plans, others may have no intention of retiring. The risk of a discrimination claim will depend on who you are dealing with.

Off the record? Off the record conversations will not work here. Legislation is in place which prohibits employees from referring to settlement offers made by their employer in subsequent Employment Tribunal claims, if the settlement negotiations fail. However, this only applies to unfair dismissal claims and not discrimination claims. Likewise, “without prejudice” discussions are not the answer as they only work where there is already a dispute with the employee, which is unlikely.

The solution The best approach is to ensure that you have discussions with all employees, whatever their age, about their plans and career aspirations, perhaps

building this into the annual appraisal process. These discussions can include the question of where they see themselves in the next few years which in turn could result in them talking about their retirement plans. Questions such as “are you planning to retire soon?” should be avoided, but if a teacher indicates an intention to retire, there is then no problem in discussing planned retirement dates and any changes to working patterns (such as reduced hours) which the teacher might desire in the lead up to retirement. Schools should ensure that the leadership team is equipped to handle these discussions and receives training on avoiding age discrimination.

An alternative solution? Schools may be tempted to dismiss teachers on performance grounds, rather than waiting for them to retire. However, they need to be careful. They must not assume that performance has deteriorated with age. They will need evidence. If a teacher has performed at the same level for many years, starting a performance management process as they get older will be a strong indicator that the real reason for acting is their age. This could make any subsequent dismissal unfair as well as discriminatory.

Planning for retirement – the teacher’s perspective Comment by TRACY ISAAC, Business Development Manager for Teachers at Wesleyan

When a Wesleyan financial consultant sits down to talk to a teacher about retirement, the first thing they do is have a discussion that fully details the customer’s financial situation and makes sure the plans they already in place match their ambitions for later life.

The financial consultant together with the teacher, will form a plan focussing on income and expenditure, including things like:

• What they plan to do in retirement (travel, hobbies, etc) and how much this will cost.

• Whether they will need capital to clear any debts.

• The benefits they will receive from the Teachers Pension Scheme, and any private arrangements

• The state pension and when that will start to pay out. If they retire early, it could be six or seven years before they get to claim their state pension.

Your money needs to last as long as you do It’s important to remember your assets and money need to last as long as you do. You could live for 30 years or more after retirement, almost as long as you were at work, so it is better to plan for a long and healthy life, rather than trying to guess how long you will live for and budgeting that way. One way to look at it is that it’s like going on holiday. If you spend all

your money in the first week, the second week is pretty miserable. Better to budget properly and leave some left over.


Managing the changes in your expenditure If you have a personal pension, the new Pension Freedoms mean you can release a good chunk of cash immediately, but by accessing it, what will this mean for your finances in the future? The more capital you release, means you will receive less pension income in the future. Your expenditure in your retirement years will also likely vary

depending on how old you are. For your first few years of retirement, you will still be relatively young,

and hopefully healthy. This means your expenditure could be high as you go travelling and continue with any hobbies or activities you are involved in. Also, by the time you retire the expenditure should have decreased

because you won’t have a mortgage, and, if you have children, they should have left home and will no longer be relying on you to support them. It is often the case that people find they are as well off in retirement as

they were while they were working. Their income obviously decreases as they are not earning anymore, but their expenditure is also down, so it balances out. As people get older, and not as mobile, your expenditure often

decreases as you are not as active and stay close to home more. However, as you get even older, your expenditure will increase again if you start needing private care. A financial adviser with expertise of the teaching profession will be

able to help you plan effectively to ensure you have the finances in place to meet your needs throughout your retirement.

December 2016

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