Why are teachers opposing changes to pension contributions etc

1. Working together to defend your pension
Thanks to Camden NUT

2. Our case is very simple
• Our pensions are affordable
• We agreed cost sharing changes to the scheme
in 2006
• These changes are bringing about the desired
savings and costs are falling
• The government has not carried out a valuation
of our scheme
• So they have no evidence that these changes
are necessary

3. Pay more, work longer,
get less
• Up to 50% increase in pension contribution
and more
• Work to age 68 or more
• Pension age linked to state pension age
• Move to career average
• Change indexation to CPI (lower than RPI)

4. A pay freeze
• Pay has been frozen for the next two years
• Institute of Fiscal Studies say government
economic policies leading to 10% drop in living
standards
• Inflation is now over 5% on both CPI and RPI

5. RPI - CPI
The government changed the indexing of our
pensions from RPI to CPI in April 2011.
CPI is 0.8% a year less than RPI on average.
This is a 15%
cut to our
pension.

6. Who pays what?
Current Scheme
Proposed Scheme
Employee: 6.4%
Employer: 14.1%
Employee: 9.5%
Employer: 10.5%
Total contributions = 20.5%
Total contributions = 20.1%
Overall contributions have gone down, this gives the
lie to the government’s claim that our pension scheme
is in crisis. It is a way of teachers subsidising
underinvestment in schools.

8. Accrual rates
Pre 2007 scheme
Post 2007 scheme
• Accrual rates 1/80th
• Accrual rates 1/60th
• Lump sum 3/80th
• No lump sum
• Normal pension age 60 • Normal pension age 65
Proposed scheme
• Accrual rate 1/65th
• No lump sum
• Normal pension age 68

9. An example
Teacher works for 30 years and retires at 63
on the average retirement salary of £37,900.
Pre-2007
scheme
Post-2007
scheme
Proposed
scheme
Annual pension
£14,212
Annual pension Annual pension
£17,054
£13,119
Lump sum
£42,637
No lump sum
No lump sum

10. Career average vs final salary
• The government have said they will move us to a
career average scheme.
• Everyone loses.
Classroom teacher
Senior teacher
Headteacher
-5%
-20%
-35%