Pensions overhaul will trigger exodus of staff
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4 average rating | Comments (19)
Last Updated:
27 June, 2011
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News
Unions expect a “surge” of people in their 50s to leave in the next five years
A proposed overhaul of the teachers’ pension scheme will lead to an exodus of experienced staff and put newcomers off the profession completely, union experts have warned.
Unions say they expect a “surge” of people in their 50s to leave the profession in the next five years because they will feel it is “simply not worth” continuing to work for reduced pension benefits.
A major review of public sector pensions by Lord Hutton recommended last week that workers retain final-salary benefits made on pension contributions until “the end of this Parliament”. However, it said payouts on contributions after that should be calculated on a lower career-average basis.
The review also called for the age when teachers access their pensions to be brought in line with the state pension age, which is due to go up to 66 by 2020. The pension age for teachers is currently 60, or 65 for anyone who entered the profession after 2007.
The Government is expected to respond in full to Lord Hutton’s proposals later this spring, but has already set out plans to change public sector pensions.
From next month, payouts will be calculated using the generally lower Consumer Price Index inflation measure instead of the Retail Price Index. Teachers’ pension contributions are also set to increase by about 50 per cent over the next four years.
Martin Freedman, head of pay and pensions at education union the ATL, said: “There would not really be much motivation for these older teachers to carry on.
“It’s all very well for Hutton to say people are living longer so this has to happen, but older people still get angina and arthritis and other age- related conditions that might stop them standing up in front of a class.”
David Binnie, pensions consultant for the Association of School and College Leaders, said: “People feel that the last thing they want late in their career is having their pension messed about with. It may dissuade teachers from going from a deputy headship to headship, or maybe taking on a federation.”
Russell Hobby, general secretary of heads’ union the NAHT, said pension scheme changes would make the profession less attractive to newcomers.
Meanwhile, the Independent Schools Council is calling for assurances that teachers in private schools will still have access to the teachers’ pension scheme. In his report, Lord Hutton said it was in principle “undesirable” for private sector workers to be signed up to public sector schemes.
REVIEW - Hutton’s hopes
- All “accrued rights” should be protected. Pensions based on contributions made up until the changes come into effect will be paid out on the existing terms.
- A final-salary scheme should be replaced by a “career average” by “the end of this Parliament”.
- Public sector workers should get their full occupational pensions at the same age as their state pension.
- Members should have “greater choice” over when to start drawing part of their pensions. Flexible retirement, with people working while receiving pensions, should be encouraged.
Original headline: Pensions overhaul will trigger exodus of older staff, warn unions
Comment (19)
Who thinks that a 66 year old is going to inspire and to be able to show pace and progression in all their lessons? This government needs its head examining!
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19:24
18 March, 2011
resg1
Agreed - some 66 year olds may be excellent but some will definitely be of a 'lesser vintage'.
I notice that Blair, Cameron, Clegg will be long retired(at our expense) by that age - so when did they peak?? (if at all)
The ridiculousness of these propositions is galling given that they come from a largely 'young' millionaire cabinet.
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20:30
18 March, 2011
tcains
Tired already and only 54. I am looking at my options to go early from next January. Deputy Head. Love the children and the teaching but cannot take another Ofsted or 3!
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21:10
18 March, 2011
Abolishofsted
As a 55 year old. Whether or not I deserve the accolade, I am still regarded by students and colleagues as both creative, inspirational and considerably more knowledgeable and literate than those from gen x and beyond. Being of a "lesser vintage" has given me the responsibility of correcting the poor grammar and spelling of younger colleagues who have difficulty stringing coherent sentences together for their reports. I fully expect my brain to cope with this for another 10 years. Go the "lesser vintage"!!
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23:48
18 March, 2011
kiwiminstp
Now Kiwi I'm sure the comment of lesser vintage was aimed at less exceptional individuals. I come from a long-lived line who usually retain full faculties will into their 9th decade, however this is somewhat unusual.
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The real question is could you expect to function in this manner for the next 15 years and would this be leaving you enough time to enjoy your retirement in good health?
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0:31
19 March, 2011
A_Teacher_Of_Computing
Why on earth should state pension and career pension have to have the same start date? They don't for footballers, pilots etc. Teachers are put under increasing pressure - in my sixth form college there is so much coursework it is 70-80 hour weeks from september to may, working over every "lunch time". Access to a pension at say 60 seems an entirely sensible way of enabling people to "down stress" - whilst still getting a different (perhaps part time) career elsewhere.
Or perhaps the government would prefer to have us all continue until we drop dead in front of a class and save paying any pension at all.
I'll be leaving the pension scheme when they increase contributions - in your 50s with pay frozen, you're better off out of it so that accrued rights still grow at CPI... I can invest 3 or 4 grand a year far better myself to be honest. Younger people still at least benefit from the death in service, but for me it is a no-brainer.
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7:01
19 March, 2011
andyravenscroft
I wonder if the Chancellor could explain the "clear rationale" for public servants to make greater contributions to the pensions bill?
I'll help him a bit........
Teachers (& their employers) contribute 20% of their gross pay for their entire career; which can be up to 45 years. For that they get 1/80 of their final salary for every year worked in pension plus a lump sum or 1/60 if employed after 2007 with no lump sum. If they retire early they can lose up to 25% of final benefits due to actuarial reduction. On average teachers earn under £30,000 & currently the average teachers pension paid out is well under £10,000. The teachers scheme was altered 4 years ago and is FULLY FUNDED by members; there simply is no statistical argument for increasing contributions at all.
A 3.4 per cent increase in pension contributions by 2014 doesn't sound a lot but represents an extra £100 per month to each teacher on average, on top of a public sector pay freeze, higher indirect taxes, fall in relative earnings & rising inflation.............teachers are being asked to do more for less.
Most public sector pensions are a variation on the old Ponzi fraudulent investment scheme. Teachers, Fire service people, Police etc have all paid huge sums of money into the scheme to fund current pensions & are right to be upset that now they're going to be asked to cough up yet more.
The statistics for forcing this current increase in teacher pension contributions through are FUNDAMENTALY FLAWED. There is no Public Sector Pension 'Black Hole'; it is a statistically created crisis.
No Black Hole?
The ConDem's take the pensions of teachers alongside the Police service pensions, Fire service pensions etc and then add in the BLACK HOLE which is the Armed Forces pensions. Teachers & their employers currently pay in 20% of a teachers pay for up to 45 years, and the Police/Fire service pay in a greater percentage for less time alongside the employer’s contributions which pay in huge amounts. The Armed Forces pay absolutely no contribution to their pensions. In the words of Monty Python; not a sausage, bugger all!..........that is why we have a Public Sector Pension Black Hole.
Traditionally the Armed Forces were not asked to actually contribute to their pension; they were given a non-contributary pension award. I have no argument & am not asking the forces to pay 'more'; but the ConDem's should not use teachers to cross-subsidise the armed forces pensions.
The cure?
1. Look at teachers, fire service, police service and others who PAY MONEY IN large pension contributions already separate from those who don't.
OR
2. Pay the Armed Forces 10% extra in pay & then take it off them as a 'pension contribution'; then include them with teachers, fire service, police service and others in calculating overall pensions.
Either way the Public Sector Pension Black Hole will vanish completely or at least reduce to a manageable size in seconds! That way the ConDem's have no excuse for 'reining in' pensions!
Do not be taken in; this is simply the ConDem party telling teachers to pay for a financial crisis that was created by the banking sector. A banking sector who currently are raking in millions & paying themselves a huge bonus out of what is effectively public money!
BIG Questions
Why aren't bankers being TOLD to rein things in? Why do the ConDem's wish to effectively impose extra taxes on one section of public sector workers & ignore the damage done by bankers to the economy? Could it be to do with who financially supports the Tory Party?
A few more FACTs.
1. The Local Gov. Pension Scheme (the biggest public sector scheme) is not funded by the taxpayer. It is funded by underlying investments built up from the employers and the employees contributions. This fund is well run by various area based pensions authorities. They are not in deficit despite and receive no additional support from taxation.
2. The Universities scheme is also funded from investments made by members of the scheme.
Cuts in any either of these schemes will not save taxpayers money simply because the taxpayer doesn't pay the pensions.
One Last thing:
On page 23 of the Hutton report there is a projection of how much public sector pensions will cost as a percentage of GDP in future years. Even taking into account different assumptions for life expectancy and workforce growth, the cost of public sector pensions has peaked, and between now and 2060 will fall year in, year out. Even in the worst-case cost scenario, where we all live longer and workers survive Osborne's axe, in 2060 public sector pensions will cost around 1.5% of the GDP, compared with 1.9% today.
This is all explained in The Guardian's money blog - it shows that, while there may be a need to modify pensions for new employees, the claim that it "can't be afforded" for existing staff is proved to be utter nonsense - even Hutton recognises that.
A commitment is a commitment.
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People recently fought for democracy in Eygpt & are currently fighting for democracy in Libya; so how come we have an UNELECTED Tory government disguised as a ConDem party with NO MANDATE from the people causing more damage to the public sector services & workforce.
Our egyptian tahrir square 'moment' is fast approaching!
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12:26
19 March, 2011
Brooke Bond
We occasionally get 'trolls' supposedly from the private sector or simply just Tory-nudgers paid to get deabte on blogs moving in a right-wing direction who tell us how luckey we are to even have a job let alone a pesion that few in the private sector can dream of.
I do think that some people are motivated by a form of narrow minded idea that the private sector directly pays us teachers & we teachers are somehow bleeding them dry. (ditto all public sector workers). I need to address these people so bear with me while I explain a few economic facts about why there is no direct link between taxation & paying teachers.
Consider this.........
1. £1 is taken from YOUR wage packet via tax
2. I get £1 as a teacher for teaching. (We'll ignore ME paying tax).
3. I then spend that £1 on the goods/services YOU produce in the private sector providing you with income to pay your tax bill.
4. Who is paying for who? If enough of 'me' get laid off & stop buying your goods/services you go bust!
Consider this.........
1. I get £1 as a teacher for my teaching.
2. I save 10% & spend 90% in a private sector shop.
3. The shop keeper saves 10% & spends 90% in another private sector shop.
4. That shop keeper saves 10% & spends 90% in yet another private sector shop.
5. Repeat until money vanishes.
6. My £1 raised GDP by the sum of that infinite Geometric Progression which if a=£1 & r=0.1 comes to a total of £10. Take my word for this as a mathematician or look up 'multiplier' in economic theory.
7. You THINK you gave me £1 from your wage packet in tax but I KNOW I generated £10 of income with it; £1 was my public sector income and £9 was income in the private sector.
8. Consider what will happen to the whole economy if enough of 'me' haven't got the money to spend in any private sector shops.
Macroeconomics isn't as simple as Dave & his millionaire mates think; they're using mircoeconomic policies to solve macroeconomic problems & wonder why they are causing chaos.
As each public sector worker is laid off, or is paid less, the UK GDP reduces; we really are in this together. By April when the real cuts bite we'll see incomes (& GDP) drop dramatically; up to now a small growth in a larger private sector has offset a larger cut in the public sector but that can't last as incomes of everybody drop.
Dave & his millionaire mates are more interested in their right wing ideology which just simply says: 'public sector bad, private sector good'. They are NOT concerned about private or public sector unemployment; the banking crisis is allowing them to do the things they have been planning for decades.
In the 1980's a similar Tory party got obsessed with reducing inflation at all costs. The cost being huge unemployment, drop in incomes & whole industries vanishing. At the moment the obsession is cut-hard-and-fast; do WE really want to live in a country that can't afford libraries, teachers, health service, police, fireservice? But more importantly by cutting the public sector badly the Tories are cutting a large part of the blood supply off to the private sector.
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12:29
19 March, 2011
Brooke Bond
The problem with that argument is that if it were true, and your employment did benefit the economy as you suggest, then it would be beneficial to employ as many people as possible.
You may be a mathematician but you do not have a clue about economics.
I would point out that, as in the 1980s which you clearly do not remember, the government was handed a wrecked economy by a bunch of incompetent socialists.
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21:35
19 March, 2011
autismuk
Here we go! Infighting - get a grip of the bigger picture. Everything we have worked for is being ERODED. Brooke Bond makes extremely valid points that give us much to think about. We are being blinded by propaganda, we are made to feel as though we are causing a problem as teachers with our pension scheme that is now being attacked. As a member of the teaching profession for a number of years, I feel let down, attacked for planning and preparing for my future. I do not feel I want to carry on in this profession as the very reason I became a teacher is being sucked dry by the constant wearing down of our autonomy. We await Gove's new dictat! What will he have in store for us as we consider how much longer we can sit around in this so called profession that is telling us to give so much more for so little.
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10:55
20 March, 2011
cniles
The Armed Forces pay absolutely no contribution to their pensions. In the words of Monty Python; not a sausage, bugger all!..........that is why we have a Public Sector Pension Black Hole.
Traditionally the Armed Forces were not asked to actually contribute to their pension; they were given a non-contributary pension award. I have no argument & am not asking the forces to pay 'more'; but the ConDem's should not use teachers to cross-subsidise the armed forces pensions.
As ex Armed Forces I feel I ought to point out that we also pay into the national coffers like anyone else. Our pensions are also being cut and subjected to the same critieria, i.e. they will also be calculated against CPI as opposed to RPI. In addition most servicemen and women have a career which ends after 22 yrs. At which point they are evicted from thier homes and left to fend for themselves "on the streets" How confident would you be at 40 yrs of age having to start from scratch ? Unless you reach the dizzy heights of WO 1 (the Highest non commissioned rank ) the pension is not that great and certainly one could not live on it alone.
So please if you wish to vent your ire on someone leave the Forces out of it. We have enough people picking on us with the Government screwing us over we don't need any more !
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13:38
20 March, 2011
GRM-II
"Unions expect a “surge” of people in their 50s to leave in the next five years"
I'm not waiting! I will leave the profession after 30 years of teaching aged 58 at the end of August. With a voluntary redundancy package and a small pension enhancement, it's just not worth me remaining. Maybe everything has fallen into place for me as the school will face several more redundancies in the next few years and I’d rather go now than be “natural wastage over the next year or two….if I were to last that long. My examination results have been good, my work efforts have been praised and I will miss the contact with the pupils but I will ride the surge with sorrow as the job has changed from the one that I used to love.
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16:16
20 March, 2011
Education2go
Hutton and Gove between them have ensured that I'm not waiting either. Hutton's simplistic view that as people are living longer so they should work longer, raises the ludicrous picture of worn-out teachers in their mid-sixties running around after pupils the same age as their grandchildren. I'm finding it inceasingly hard as it is to stay on my feet all day delivering a full teaching timetable to the standard I should, and I'm a healthy 59 year old. I don't think I could physically do this job until my mid-sixties. This is why I've decided to retire in the summer, while I'm still able to. That and not wishing to hang around any more whilst the contemptible Gove continuously attacks the profession I love and its heroic work. Another five years? No thank you gentlemen, I'd sooner leave now with my dignity intact.
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18:16
20 March, 2011
martinalford
autismuk,
I may only be a mathematician but I also know the difference between macroeconomic policy & microeconomic policy.
Quote: 'I would point out that, as in the 1980s which you clearly do not remember, the government was handed a wrecked economy by a bunch of incompetent socialists.'
Having survived the 1980's which I remember only too well I think you are suffering from Daily Mail-itiss. A disease of the brain brought about by actually believing right wing nonsense. The inflation of the late 1970's was caused directly by the raising of oil prices from the OPEC nations; all the mess that the economy was in can be traced to those oil price rises. Yes the Tories got it wrong in the mid-1970's & Labour got it wrong in the late-1970's but the Thatcher-Tory government got elected on the back of high unemployment from failed policies promising to sort out the unemployment; remember those ''Labour isn't working'' posters? The Tories promptly doubled unemployment!!!!! The Tory party don't see high unemployment as a 'problem' in the way that 95% of voters do. If you hadn't noticed the UK unemployment figures just went higher last week that at any time in the last 17 years; and once again THEY don't care because that isn't THEIR objective.
Quote: 'The problem with that argument is that if it were true, and your employment did benefit the economy as you suggest, then it would be beneficial to employ as many people as possible.'
Before telling me I don't understand economics or the 'multiplier' you should do some reading yourself. The multiplier dates from work in the 1890s by the Australian economist Alfred De Lissa, the Danish economist Julius Wulff, and the German American economist Nicholas Johannsen, the latter being cited in a footnote of Keynes.
At one stage of the Great Depression Keynes put forward the idea of paying one group of people to dig holes & another to fill them in; ignore what they were doing. The stimulation effect on the economy of THEIR SPENDING from their invented pay is what economics is all about. 95% of people in the private or public sector do not produce anything, but they move money around. Moving the money is all that counts. Laying off public sector workers will (not might, definately will) have a drepressing effect on the economy.
You may not like macroeconomics or what the theory is saying, but time after time you can trace depressions back to governments who stop spending.
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15:07
21 March, 2011
Brooke Bond
GRM-II,
As a former member of the Reserve Forces there is no way I'd vent my spleen on the military; you SHOULD have been paid more & you SHOULD have had a contributory pension as opposed to the so called 'free' one you get now. You don't deserve something that looks like 'charity' you deserved a decent salary in the first place.
The right wing press paint a picture of ALL public servants being given non-contributary ''gold-plated'' pensions when the truth is much different; we are all being shafted by this buch of Con-men. How Cameron has the nerve to send Tornado pilots into battle this week having sent Tornado pilots their P45's last month is truely amazing. There are no scruples with the ConDem's.
Yes you got the CPI 'cut' as opposed to RPI but at least YOU had sympathetic headlines; teachers got that cut & didn't even make the news.
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15:17
21 March, 2011
Brooke Bond
Agree with Brooke Bonds analysis of multiplier. Government is assuming consumption drops due to real income drops in public sector workers will be compensated by enterprise, i.e. increase in supply. With unemployment at 2.5 and costs rising (see inflation today) - there is more that enough arguments for a contraction in supply. How will this help with demand? How are services paid for? Mainly income tax, NI and VAT - and I guess a few firms pay a little corporation tax. Effect? Squeeze us all- we stop spending and we pay less tax. Squeeze us all we stop saving and banks lose liquidity- businesses have less to borrow. Common sense would be to freeze and allow pensions to be flexible i.e. give us the choice when we want to retire and the option to go part time without loss of pension benefit.
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20:37
22 March, 2011
glynmanton
labour/ tory; macro/ micro economics; armed forces contributions or not.... doesnt matter (and for those who are, I am no legal expert or mind, I am going to write about what should morally be so). Teachers do a hard, tiring, thankless, relentless, responsible job which has moments of reward, oodels of paperwork and whilst being called professionals are treated like children. The point should be, we went into teaching and part of that was a final salary pension, it's why we put up with the terrible pay, long hours and verbal abuse. To remove that now, whilst simultaneously effecting a pay decrease by the backdoor is unacceptable, and should be seen as a breach of contract by the government.
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14:55
23 March, 2011
musicalmermaid
autismuk,
I have just heard the growth predictions downgraded yet again during the budget today.
This is clear evidence of the multiplier effect working in reverse. Public sector shrinks, demand falls, tax revenue falls, unemployment costs go up but every £1 of public sector money taken out of the economy reduces peoples incomes (private sector & public sector) by much more. That £1 from a teacher/civil servant/military person/police/fire/ambulance etc is no longer being spent in a shop so that shop keeper cannot spent it in another shop etc etc (see above).................we are in a spiral of contracting grow. The spiral will not stop until we spend more in the public sector or the private sector grows by over 25% to soak up those who are removed from the public sector.
You are blind to what is happening in the economy when you say: 'The problem with that argument is that if it were true, and your employment did benefit the economy as you suggest, then it would be beneficial to employ as many people as possible.' The ideas in macroeconomics are often counter-intuitive and the arguments require real thought in depth. No thriving country has ever balanced it's taxation/expenditure budget and no thriving country has ever had zero national debt; it is complete & utter folly to try to achieve these aims.
George Osborne got a 2:1 in Modern History from Oxford so isn't exactly schooled in the subject of Economics but Cameron studied Philosophy, Politics and Economics at Oxford, gaining a first class honours degree. Cameron should really know better than to pretend that we need to ''balance the books'' or ''reduce our debt to zero'' in order for us to have a ''good'' economy. He was selling microeconomic solutions at the last election & he knew that these are unachieveable as well as being undesireable but (and this is the BIB BUT!) they allow him to reduce the size of the public sector in the economy and that is what his political ideology says is a 'good' thing. Like Thatcher & her ideology these people really don't care about unemployment; they see it as a way of keeping labour costs low.
Unemployment has risen to 2.5 million (the highest in 17 years), RPI inflation is at 5.5% & rising, grow isn't happening but still the Tories continue to cut......we didn't elect these people, they have no mandate for this AND more importantly their cutting isn't doing anything apart from destroying the economy. At what point do we rise up & say: 'enough'?
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15:18
23 March, 2011
Brooke Bond
This silly government passed a ruling that no-one actually has to ever retire. As a single, childless person, with nothing much to retire for, I fully intend to go on working until I drop- hopefully when I'm at that much extended old age that we're supposed to live to- and that way if i drop dead in front of a class as a geriatric- at least I won't lie undiscovered for months on end.
My pupils, on the other hand will be traumatised for the rest of their days
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22:26
27 June, 2011
jmpa169