pensions
DESCRIPTION
Why are teachers opposing changes to pension contributions etcTRANSCRIPT
Working together to defend your pension
Thanks to Camden NUT
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
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)
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
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.
Current Scheme
Employee: 6.4%Employer: 14.1%
Total contributions = 20.5%
Proposed Scheme
Employee: 9.5%Employer: 10.5%
Total contributions = 20.1%
Who pays what?
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.
Accrual rates
Pre 2007 scheme• Accrual rates 1/80th
• Lump sum 3/80th
• Normal pension age 60
Post 2007 scheme• Accrual rates 1/60th
• No lump sum• Normal pension age 65
Proposed scheme• Accrual rate 1/65th
• No lump sum• Normal pension age 68
An example
Teacher works for 30 years and retires at 63on the average retirement salary of £37,900.
Pre-2007 scheme
Annual pension £14,212
Lump sum£42,637
Post-2007 scheme
Annual pension £17,054
No lump sum
Proposed scheme
Annual pension £13,119
No lump sum
Career average vs final salary• The government have said they will move us to a
career average scheme.• Everyone loses.
-5%
Classroom teacher Senior teacher Headteacher
-20%
-35%