Defending teachers’ pension rights
General Secretary Ronnie Smith offers an insight into ongoing discussions on the Scottish Teachers’ Superannuation Scheme. While the scheme will undergo some changes, the joint union campaign to protect the pension rights of public sector workers has ensured that the key elements of the scheme will remain in place for Scotland’s teachers.
n November last year the government and the TUC reached agreement on a set of principles to underpin discussions on public sector pension schemes for health service workers, Civil Servants and teachers. This followed the government’s withdrawal of its intention that the Normal Pension Age 65 would apply to current scheme members in respect of all service from 2013 onwards. The Public Services Forum Agreement opened the way for further scheme discussion. For teachers, these discussions have been taking place through the Teachers’ Pension Scheme Review Group at UK level. The TPS Review Group comprises representatives of government, employers and teachers’ unions. The representatives of the teachers’ unions, including the EIS, are drawn from the Teachers’ Panel of the Teachers’ Superannuation Working Party which is a standing group to facilitate discussions on pension matters between government, employer and unions.
The pension is a defined benefit based on final salary which is the best 365 days over the last three years of service. Currently scheme members contribute 6% of salary while employers contribute 12.5%. The contribution levels and benefits are agreed by Parliament and the scheme is underwritten by the state.
A central part of the PSF Agreement was that “existing scheme members will have the “In early right to suffer no detriment in scheme terms of their Normal Pension discussions Age and will retain their existing union pension provision unless representatives individual or collective agreements argued that within sector specific negotiations the unions are reached which allow changes were not to these provisions or transition prepared to to new schemes”. In early scheme consider discussions, union representatives shifting the stated that they were not goalposts prepared to consider shifting the goalposts for current scheme for current members. Those currently in scheme the scheme entered the scheme members.” with the understanding that they Ronnie Smith, EIS General Secretary
The TPS Review Group is examining current schemes and the likely costs of the schemes. This provides an opportunity to consider changes to the scheme within a cost envelope set out by Treasury and reinforced in the PSF Agreement. The Scottish Teachers’ Superannuation Scheme is administered by the Scottish Public Pensions Agency and provides pension benefits calculated on the basis of 1/80 of pensionable salary for each year of pensionable service. On retirement, the scheme also provides a tax free lump sum of three times the annual pension.
14 Scottish Educational Journal May 06
could retire at 60 on an unreduced pension.
Discussions within the TPS Review Group have been conducted thus far on the basis that NPA 60 will continue to apply to current scheme members with NPA 65 applying to those entering the scheme from an agreed implementation date.
The teachers’ unions have argued that new entrants to the scheme should have an improved accrual rate for pensions. This would help to offset the effect of an actuarial reduction if a future scheme member retired before NPA 65. Discussions have focussed on an accrual rate of 1/60 basis with no lump sum. It would be open to scheme members to decide whether to commute part of the pension into a lump sum by surrendering £1 of pension for £12 lump sum. Up to 25% of the pension could be so commuted under new Revenue rules. It is also possible that, while current scheme members would
“It would be open to scheme members to decide whether to commute part of the pension into a lump sum by surrendering £1 of pension for £12 lump sum.”
SEJ May 2006