PENSIONS CAMPAIGN UPDATE

FEBRUARY 2012

Current position

• Government continuing to press for cuts in teachers’ pensions.

• Government concessions on 2 November were welcome - but not enough

• NUT action on 30 June and threat of 30 November action helped to secure concessions

• Government ‘final offer’ on 19 December involves no new money – but some repackaging

• Government says negotiations are now over – NUT preparing for further strike action alongside other unions.

Why haven’t we accepted the Government’s offer?

• The Government still wants you to pay more, work longer and get less during retirement

• Despite the Government’s claims, our pensions are affordable - £46bn more paid in than paid out since the scheme started!

Key elements of Government 19 December offer

• switch from final salary to career average.• increase in the normal pension age (the age at

which pensions can be taken in full), to state pension age (68 or higher for anyone under 34)

• pensions in payment to be increased with only CPI inflation;

• if you retire before your NPA pension reduced by 3 per cent a year between ages 68 to 65 - 5% for years below 65

• accrual rate of 1/57th of pay per year of service (up from 1/60);

• but built-up pension accruals to be re-valued only by CPI inflation + 1.6 per cent instead of by average earnings

Pay More

• Government plans 50% contribution rise, from 6.4% to an average 9.6% by 2014

• Increases start from April 2012

• Further increases in April 13 and April 14

Salary Band (FTE)

Contribution rate in 2012-13

Increase from current 6.4%

Up to £14,999

6.4% 0%

£15,000 - £25,999

7.0% 0.6%

£26,000 - £31,999

7.3% 0.9%

£32,000 - £39,999

7.6% 1.2%

£40,000 - £74,999

8.0% 1.6%

£75,000 - £111,999

8.4% 2.0%

Over £112,000

8.8% 2.4%

Work longer

• Scheme pension age to be linked to State pension age– Under 34? Work till 68 for a full pension– Aged 34 to 50? Work till 67– Aged 51 to 54? Work till 66

• Transitional protection if within 10 years of current pension age (see later)

• Pension age may be even higher in future – 70+ for youngest teachers?

Get Less

• Career average means less for vast majority of teachers

• Accrual rate of 1/57 of average salary per year but

• Lower ‘revaluation rate’ means your pension will lose ground against average earnings over period to retirement

• CPI inflation link takes £35,000 from teachers with £10,000 pension

Transitional protection

• Teachers within 10 years of NPA on 1 April 2012 stay on existing FS scheme

• Teachers up to further 3.5 years away have tapered protection

NPA60 scheme member

Age at April 2012

Age when moving to new

CA scheme

50 Stays in FS

scheme

49.5 58.5

49 57

48.5 55.5

48 54

47.5 52.5

47 51

46.549 years 6 months

- no protection

What will I lose?

• Use the updated NUT pensions calculator at www.teachers.org.uk/pensions to see:• How much you’ll lose from your take home pay • How long you’ll have to work for your full pension • How much you’ll lose from your pension if you

still retire at your current pension age• How much you’ll lose over a 25 year retirement

due to lower pensions and lower indexation • If you’re 50+ at 1/4/2012 – you stay with current

pension and retirement age, but you’ll still pay more and lose out from lower indexation

Are our pensions affordable?

• Yes – the TPS has already been reformed as a result of our agreement in 2006!

• Reliable sources show the costs are already falling as planned

• We’ve agreed to pay more – but only if the increase is justified, not to help pay the costs of the recession

• Teachers’ pensions aren’t “gold plated”• Continuing our campaign will strengthen

our hand in our negotiations and persuade the Government to move further

The real pensions problem

• The private sector• Two-thirds of workers have no scheme• 90% of final salary schemes are closed• Employers’ contributions cut by more than half

• The result – higher costs to the State and future taxpayers

• Cutting public sector pensions just makes everyone poorer in retirement

• We need decent pensions for all!

What happens next?

• NUT in discussions with other unions on further national action

• Priority issues = pension age and contribution hikes

• Survey of members about willingness to take part in further action and on-going campaign

• Encourage members to SAY YES

What you can do

• Hold a workplace meeting – open to all • Use the pensions loss calculator at

www.teachers.org.uk/pensionscalc • View the news and briefings at

www.teachers.org.uk/pensions• Encourage colleagues to complete the NUT

survey• Sign the pensions e-petition at

http://epetitions.direct.gov.uk/petitions/29103 • Recruit any non union members to the NUT• Good luck and thanks!