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Teachers' Pensions Latest

Coins falling in to a pile

On 25 April 2013 the Public Service Pensions Bill received Royal Assent and became the Public Service Pensions Act. The Act provides the statutory basis for the Coalition Government’s wholesale reforms of public sector pensions across the UK. Teachers will pay more into their pensions and work longer for lower benefits. Details of the main changes in the Act can be found in the News and Resources section. Copies of the NASUWT’s latest bulletins on pensions are on the right of this page.



Latest News

Whilst the pension reforms remain unacceptable, some improvements have been secured, including the ten year and additional safeguarding and the tiering of contributions to ensure that those who earn the least pay the least.

On 25 April 2013 the Public Service Pensions Bill received the Royal Assent and became the Public Service Pensions Act. The Act provides the statutory basis for the Coalition Government’s wholesale reforms to public sector pensions across the UK which will result in teachers paying more and working longer for lower benefits. Further details of the main changes on the Public Service Pensions Act can be found in the News and Resources section below. Copies of the NASUWT’s latest bulletins on pensions are on the right of this page.

Except for those individuals aged 50 or over on 1 April 2012 who are covered by the transitional protections, the main changes which will take effect in respect of service after 1 April 2015 include:

  • The change from a pension based on final salary to one based on career average revalued earnings (CARE);
  • The revaluation of CARE benefits by less than the rise in national average earnings;
  • A normal pension age (at which benefits can be drawn without an actuarial reduction) linked to State Pension Age. The State Pension Age is already due to rise to 66 by October 2020, to 67 by 2028 and to 68 at least by 2046 but will be reviewed on a regular basis every 5 years;

Further details of the changes can be found in the Government’s so-called Proposed Final Agreement document on the DfE website [insert link at http://www.education.gov.uk/schools/careers/payandpensions/b00204965/proposed-teacher-pension-scheme-reforms

The NASUWT totally rejects the Coalition Government’s rationale for the changes and has repeatedly challenged Government to proceed with the long-overdue 2008 valuation of the current Teachers’ Pension Scheme (TPS) and commit to genuine discussion on its findings, which government still refuses to do. 

The NASUWT is in dispute with the Coalition Government over its changes to teachers’ pensions, the unjustified increases in teachers’ contributions to the pension scheme, as outlined below, and the change from RPI indexation to CPI indexation, which will result over time in lower pensions for all.

The Department for Education has published the outcome of the consultation on further increases in contributions that will apply to members of the Teachers’ Pension Scheme (TPS) in financial year 2013-14. As a result the following rates will apply from 1 April 2013:

Pensionable Annual Earnings in Relevant Year (£) Contribution Rate in 2013-14 Increase (against 2012-13)
Lower Upper Tier % Tier %
Below £14,999 6.40% 0.00%
£15,000 £25,999 7.00% 0.00%
£26,000 £31,999 7.90% 0.60%
£32,000 £39,999 8.80% 1.20%
£40,000 £44,999 9.20% 1.20%
£45,000 £74,999 10.10% 2.10%
£75,000 £99,999 10.60% 2.20%
£100,000 £150,999 11.20% 2.40%

 

 

Northern Ireland

Scotland


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Timeline of Negotiations

On 20 December 2011, the Coalition Government confirmed that it was proceeding with a series of Heads of Agreements on changes to public service pension schemes, including the future arrangements for the Teachers’ Pension Scheme (TPS). After intensive meetings between the Department for Education (DfE) and unions representing teachers and lecturers, a Heads of Agreement document was published as a basis for continuing further discussions on reform to the TPS.

The DfE Heads of Agreement document sets out the Government’s preferred scheme design for the reformed TPS to be introduced in 2015. The Coalition Government has invited unions to take the document to their Executives and to seek a commitment to suspending industrial action on pension reform while the final details of the TPS are being discussed.

The main provisions for reform of the TPS in England and Wales will include changes to:

  • the Normal Pension Age (NPA) for teachers – this will in future match the state pension age;
  • the level and structure of pension contributions paid by employees, with an average 3.2% increase in pension contributions from employees;
  • final salary arrangements to be replaced by a career average scheme;
  • transitional protections for teachers within 10 years of retirement as of 1 April 2012 plus a further 3.5 years of additional tapered protection;
  • the factors affecting teachers taking early retirement, with provision for teachers who retire early to benefit from less punitive actuarial reduction between age 66, 67 and 68;
  • the index for pensions revaluation in service to be on the basis of CPI +1.6%;
  • pension accruals at 1/57ths.

A copy of the DfE Heads of Agreement document can be accessed here

The annex containing the Government Actuary's Department advice on verifying that the proposed scheme design is within the cost ceiling can be accessed here.

Since the beginning of this academic year, regular meetings with the DfE have taken place on teachers' pensions. All unions agreed that the basis on which they would enter the discussions was on a without-prejudice basis to engage in exploratory discussions and not to support or facilitate the implementation of the Coalition Government's proposals.

The purpose of these discussions has been to explore in detail the implications arising from applying the Government's revised Reference Scheme to the TPS.

In the period leading up to 30 November, there was an intensive programme of meetings, all focused on examining the implications of the Government’s revised Reference Scheme for teachers and exploring areas for possible further flexibility within the Government's revised Reference Scheme, the link between the teachers' pension age and the SPA, teacher longevity, pension accrual, revaluation and indexation factors, and contribution rates. However, until late in the day, there were no specific proposals on the table for changes to the TPS.

The DfE put union representatives under considerable pressure to put their proposals for change forward. At the request of the DfE, the teachers’ side submitted detailed documentation including a statement of principles and specific proposals on pensions reform which were largely ignored by the DfE.

On 15 December, the DfE tabled a draft Heads of Agreement document as a basis for reaching agreement with the teacher unions. A final, albeit incomplete, version of the Heads of Agreement was eventually tabled by the DfE at a meeting with the teacher unions on 19 December. The DfE pressed the unions to sign up to the document in advance of the Ministerial statement on 20 December.

The NASUWT has refused to sign up to the Heads of Agreement document and has reserved its position on the document, pending further information and discussion. Unions including NUT, UCU and UCAC adopted the same position as the NASUWT. Other teacher/headteacher unions/associations agreed to sign up to the DfE document.

The NASUWT Position on teachers' pensions

The NASUWT continues to listen carefully to the views of members as part of its ongoing campaign to defend teachers' pensions. The NASUWT national ballot for industrial action has pensions as a key part of the trade dispute with the Coalition Government. The NASUWT remains committed to securing a negotiated outcome on pensions.

During the sector specific discussion, the NASUWT has expressed serious concerns about the content of the Heads of Agreement and about the process that has been followed by the DfE. The NASUWT has confirmed that it would reserve its position on the proposed Heads of Agreement in order to secure additional information on the provisions in the DfE document, to press for an equality impact assessment of the DfE proposals, and in order to continue to negotiate on other changes to the TPS.

Key Points for the NASUWT

The NASUWT’s position throughout the discussions with the DfE has been guided by the need to secure the best interests of all members.

The Coalition's proposals for teacher pension changes have a different impact on different groups of members, depending on when they started teaching, whether they are in the pre-2007 or post-2007 pension schemes, and future career paths.

The major sticking points for the NASUWT that remain unresolved are:

  • the absence of a scheme valuation to enable assessment of the scale of the problem with the TPS or indeed to identify whether there is any problem at all;
  • the Government’s proposal to increase the Normal Pension Age for teachers to be in line with the State Pension Age;
  • the Government's cost ceiling for discussions within the scheme, which is, in the opinion of the NASUWT, far too low to provide necessary flexibility to protect the interests of teachers;
  • the imposed increase to teacher pension contributions;
  • the date of application of any transitional protection arrangements for existing scheme members.

Next Steps

The teacher pension discussions have been inhibited from making real progress due to the Government's prevarication, delay in providing key information and game playing.

Despite nine months of delay, the Government has sought to conclude discussions on the future of the TPS in a matter of weeks. Despite ongoing talks, the Government continued to make a series of arbitrary announcements affecting the future of the TPS, including taking off the table the option of a final salary scheme for teachers, the decision to remove flexibility in relation to linking the Normal Pension Age to the SPA, and the imposition of the 3.2% average increase in employee contributions. The NASUWT has expressed its deep concern over the failure of the Coalition Government to engage in genuine negotiations.

Throughout the process, the NASUWT has remained committed to damage limitation and to preventing the imposition of a worst-case scenario for teachers.

Further detailed work on the TPS will resume in early 2012. This will examine the provisions in the Heads of Agreement together with provisions on abatement (for service accrued prior to and post 2015), phased retirement, rejoiners, contribution rates, other scheme flexibilities, and implications of the pension reforms for Total Reward.

The NASUWT National Executive will consider the developments leading to the publication of the DfE Heads of Agreement at their meeting on 6 January 2012. The NASUWT will continue to participate in the detailed discussions with the DfE with a view to securing the best outcomes for members.


On 16 December 2011, the Coalition Government announced that it will proceed with the increase in pension contributions for teachers from April 2012. This will affect all teachers in the Teachers' Pension Scheme (TPS) in England and Wales and is likely to be adopted in Scotland and Northern Ireland.

This announcement has been made despite the fact that the national discussions on changes to the pension schemes are still in progress and not due to conclude until the end of the year.

The increase in contributions is not being made because there are problems with the teachers' pension schemes but to raise money for the Treasury. This raise in contributions is a tax on teachers and other public service workers.

The Coalition has now imposed on teachers the following increase in contributions:

Salary Band Salary Band Contribution rate in 2012-13 Increase (against 6.4%)
  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%
112,000   8.8% 2.4%

 

The Coalition proposes further contribution increases in the next two years.

The announcement on contributions is yet another illustration of the extreme difficulties the NASUWT and other public service unions have faced in seeking to negotiate and work constructively with this government.

On Tuesday 20 December, the last day that Parliament is in session before the Christmas recess, the Coalition plans to make a further announcement on public sector pensions, including teachers' pensions. It is expected that the statement will summarise the outcome of the discussions held with the TUC and unions in the various sectors about changes to existing pension schemes. These discussions are still ongoing and the NASUWT will send further information next week to members when the final position is known.

As you are aware, the NASUWT has conducted a vigorous campaign to defend teachers' pensions. Our national ballot for industrial action conducted this term has pensions as a key part of the trade dispute with the Coalition Government.

Over the last 18 months the NASUWT has regularly conducted opinion surveys of members and we have acted on the thousands of responses received, which have always overwhelmingly demonstrated members' anger and frustration about the actions of the Coalition, supported our continuing efforts to seek a negotiated outcome and stated a clear willingness to take industrial action at the appropriate time.

The NASUWT has sought to engage with the Coalition over months of national discussions. However, despite our best efforts and the work of the TUC, little progress was made.

Consequently, there was widespread support from NASUWT members for the TUC Pensions Justice Day of Action, involving all public service workers, across the UK on 30 November. Congratulations to all those involved.

Predictably, around the day of action, there was a great deal of confusing media reporting on whether negotiations on pensions were taking place, whether 'deals' were about to be struck and about exactly what was on 'offer' from the Coalition Government.

Negotiations or Discussions?

There are two key forums for discussion with the Coalition Government on its pensions proposals:

  • the central discussions, which involve ministers from the Cabinet Office and the Treasury and a TUC-led team of union negotiators;
    sector scheme discussions for each of the separate pension schemes across public services. The TPS discussions involve the teacher unions, the employers, Department for Education (DfE) officials and, from time to time, ministers.
  • The central discussions have been taking place over the last nine months. Members have received regular updates on these discussions and were advised that negotiations and progress were being severely handicapped by the fact that the Treasury consistently failed to provide key data and information necessary to support constructive negotiations.

The last meeting of the central discussions took place on 2 November 2011. At that meeting, the Chief Secretary to the Treasury, Danny Alexander, advised that he would be making a statement to Parliament that day, putting forward revised proposals for a 'Reference Scheme' (revised 'offer') that would apply to all public service pension schemes.

The Government's revised Reference Scheme included proposals for: a transitional protection arrangement for existing scheme members within ten years of retirement at 1 April 2012; a 1/60th accrual rate for the purpose of calculating pension benefits; the Normal Pension Age (NPA) to be linked to the State Pension Age (SPA); and a move from a final salary to a career-average defined benefit scheme.

The Chief Secretary's statement, the TUC's response and the NASUWT's comments were put onto the NASUWT website and can be found at www.nasuwt.org.uk/IndustrialAction. No further meetings of the central discussions have taken place despite requests from the TUC.

Sector Scheme Discussions - the Teachers' Pension Schemes


Since the beginning of this academic year, regular meetings have taken place. All unions agreed that the basis on which they would enter the discussions was on a without-prejudice basis to engage in exploratory discussions and not to support or facilitate the implementation of the Coalition Government's proposals.

The purpose of these discussions has been to explore in detail the implications arising from applying the Government's revised Reference Scheme to the TPS.

In the period leading up to 30 November, there was an intensive programme of meetings, all focused on examining the implications of the Government's revised Reference Scheme for teachers and exploring areas for possible further flexibility within the Government's revised Reference Scheme, the link between the teachers' pension age and the SPA, teacher longevity, pension accrual, revaluation and indexation factors, and contribution rates. However, there were no specific proposals on the table for changes to the TPS.

Key Points for the NASUWT

The DfE put union representatives under considerable pressure to put their proposals for change forward. A joint statement of principles was submitted but largely ignored by the DfE.


The NASUWT is seeking to represent the interests of all members in the discussions.

The Coalition's proposals for pension changes have a different impact on different groups of members, depending on when they started teaching, whether they are in the pre-2007 or post-2007 pension schemes, and future career paths.

The major sticking points for the NASUWT that remain unresolved are:

  • the absence of a scheme valuation to enable assessment of the scale of the problem with the TPS or indeed to identify whether there is any problem at all;
  • the Government's proposal to increase the Normal Pension Age for teachers to be in line with the State Pension Age;
  • the Government's cost ceiling for discussions within the scheme, which is, in the opinion of the NASUWT, far too low to provide necessary flexibility to protect the interests of teachers;
  • the imposed increase to employee contributions;
  • the date of application of any transitional protection arrangements for existing scheme members.

These are concerns common across the schemes and the NASUWT has always maintained that these can only be resolved in the central discussions.

Without any negotiation or consultation, the Coalition Government changed the indexing of pensions from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI), which immediately reduced the value of the pensions of serving teachers and of those who have already retired. The NASUWT challenged this change in the High Court. At the end of November, on a split decision of the presiding judges, the High Court ruled against the claim. The NASUWT is now taking the case to the Appeal Court as the Union believes that no stone should be left unturned in seeking to challenge the injustice and unfairness of the Government's actions.

Prevarication, Delay and Game Playing


The discussions have been inhibited from making real progress due to the Government's prevarication, delay in providing key information and game playing.

When the central talks were established over nine months ago, at a very early stage the TUC asked for details of any transitional protection that might be available and improvement in the pension accrual rate. No information was forthcoming.

Only when the NASUWT and other major public service workers announced their intention to ballot for action on 30 November was an 'offer' regarding transition and accrual rates put on the table by the Coalition. This was made on 2 November, leaving barely two months to conduct the detailed work necessary before the Coalition's imposed deadline of concluding the talks by the end of December.

From the outset, the TUC pressed for details of how calculations were being made to establish the basis for modelling of the impact of the proposals on individual teachers and other public service workers. Only recently has this been provided.

In the last few weeks, the Government has confirmed its intention to make further announcements on reforms to public sector pension schemes before Parliament rises, on Tuesday 20 December. The timing of this announcement has not been discussed with the trade unions. As the imposed deadline for completion draws near, a deadline that is completely unnecessary given that scheme changes will not take effect until 2015, the Coalition has continued to impose further changes which will materially affect the outcome of these discussions, including the arbitrary decisions to take off the table the option of a final salary scheme for teachers and the decision to remove flexibility in relation to linking the NPA to the SPA.

This raises serious questions about the Coalition Government's commitment to genuine negotiations.

Throughout the whole process the NASUWT has been committed to damage limitation and to preventing the imposition of a worst-case scenario for teachers.

The NASUWT and other unions are now in the final days of this sorry saga. The NASUWT will continue to fight vigorously to protect the interests of members and the profession.

October 2011 

See the latest information on the industrial action ballot 

Joint unions pensions lobby

28 July 2011

The Coalition Government has today issued formal consultation documentation on its proposals for the pension contribution rates for teachers and other public service workers in England and Wales for 2012/13.

The NASUWT has previously advised members that this document was to be published and that it is proposed by the Coalition that the discussions on the proposals will take place in the sector scheme discussions in each of the separate pension schemes.

On 28 July, the NASUWT and other teacher unions met with Schools Minister Nick Gibb to discuss the letter sent jointly by all the unions setting out the conditions for entering any sector scheme discussions.

The NASUWT and other unions have made it clear that they consider any talks will be on an exploratory, without-prejudice basis and that participation does not imply any agreement with Coalition Government proposals on public service pension reform or a willingness to accept any changes, including to the contribution rates.

Whilst the meeting was positive, with the Minister appearing to accept the conditions for union engagement, no final decision on participation will be made until the Department for Education (DfE) has confirmed in writing its acceptance of the NASUWT’s and other unions’ conditions for discussion.

A fundamental outstanding issue, which needs to be resolved before any meaningful engagement can take place on contribution rates, is the failure of the Coalition to provide the overdue valuation of the Teachers’ Pension Scheme (TPS) which was due in 2010. This valuation would have identified the level of contribution to be made by teachers in 2012/13 as a result of the cap and share mechanism, which was introduced as part of the agreement unions reached on pension reform with the last Government in 2005/06.

The implementation of the agreed cap and share is already set to save over £1bn on the teachers’ pension schemes. The provision of that valuation or the data used to calculate it is a vital starting point for any discussion. The NASUWT has pressed repeatedly for the information and will make it a prerequisite for discussions on contribution rates.

Teachers are already facing financial pressure from the imposed two-year pay freeze, increases in VAT and National Insurance and the rising cost of living. All teachers are badly affected, but young teachers in particular are also wrestling with the extra burden of student debt. The NASUWT will continue to press the unfairness and gross injustice of this attack on teachers and other public service workers and maintain its long-standing commitment to industrial action to protect pensions if a negotiated settlement cannot be achieved.

Update - 22 July 2011

The Teachers’ Side of the Teachers’ Superannuation Working Party (TSWP) met on 20 July to discuss the next steps on teachers’ pensions, following the exchange of correspondence between the Chief Secretary to the Treasury and the TUC General Secretary which members were advised of in the last NASUWT Pensions Latest.

The unions on the TSWP representing England and Wales, agreed to enter into sector scheme discussions on the Teachers’ Pension Schemes but only on specific terms.

Below is a joint letter which was sent on 21 July to the Secretary of State for Education, Michael Gove by NASUWT, ASCL, ATL, NAHT, NUT, UCAC, UCU and VOICE. This letter sets out clearly the basis on which all the unions believe the sector discussions should take place.

‘Dear Michael,

Teachers’ Pensions – sector scheme discussions

You will be aware of the recent developments in the TUC-led central discussions on public service pensions, the exchange of correspondence between the Chief Secretary to the Treasury Danny Alexander and TUC General Secretary Brendan Barber and the statement on the discussions laid before Parliament on 19 July.

It is in the context of those exchanges that we write to advise you that all of the Unions and Associations which are signatories to this letter have agreed to participate in sector specific discussions on the Teachers’ Pension Schemes.

However, we believe that it is important for you to understand from the outset the basis on which we have agreed to participate.

We consider the sector scheme discussions to be exploratory.

Our participation will be on a without prejudice basis and should not be taken to imply either that we have agreed to any of the Government’s proposals or actions already taken on public service pension reform or that we have conceded that such reform is necessary.

Our willingness to participate is a pragmatic and constructive response to the current circumstances, reflecting our commitment to seek a negotiated settlement.

We believe it is important that before the discussions on the Teachers’ Pension Schemes begin that we have the opportunity to meet with you to ensure that there is clarity between us about the basis on which the meetings will take place, to seek to ensure that they are productive and fruitful. We consider that a commitment from the outset, by the DfE, to transparency and provision of all appropriate information would assist in securing a positive outcome.

As the timescale set by the Treasury for this stage in the process is extremely challenging we request and would welcome a meeting with you at the earliest opportunity.

Yours sincerely

Signed by all the General Secretaries’

We will advise members’ of the Secretary of State’s response and continue to keep you updated regularly on developments.

19/07/11 - Dual-track approach to pensions talks

A meeting of the TUC-led pension discussions with Ministers took place on 13 July. At that meeting the Ministers reviewed the progress they considered had been made so far and set out what they saw as the next phase of discussions. The Ministers proposed that individual sector scheme discussions should now take place to inform the continuing central TUC-led discussions. They subsequently set out their proposals in a letter from Danny Alexander Chief Secretary to the Treasury to TUC General Secretary TUC, Brendan Barber.

The letter from Danny Alexander was discussed by all the public sector unions on 18 July at a meeting of the TUC Public Service Liaison Group (PSLG). All unions had deep concerns about the content of the letter but on balance took the pragmatic approach that sector scheme discussions were now necessary to seek to exhaust all opportunities to seek to reach an agreed outcome. As a result of the TUC PSLG meeting, Brendan Barber sent a response agreed by all unions to Danny Alexander which made clear that the unions were not conceding any ground on their opposition on key issues, such as propose increased contributions, RPI/CPI change and the increase in the normal pension age.

On 19 July , Chief Secretary to the Treasury, Danny Alexander made a written statement to Parliament on progress in the TUC-led talks to date.

A meeting of the Teachers Superannuation Working Party – teachers’ side, has been convened for 20 July. All teacher unions from across the UK are represented on that Group and there will be a discussion on how to take forward the talks on the Teachers’ Pension Schemes. The NASUWT is entering these talks on a without prejudice basis as we believe that members expect the Union to take all possible steps to prevent the imposition of adverse changes to the Teachers’ Pension Schemes.

The NASUWT’s Campaign to defend and protect teachers’ and other public service workers’ pensions is on going and will continue into the new academic year. Opportunities are being taken to explore joint activities with other teacher unions campaigning on pensions. Despite the fact that from 20 July Parliament is in recess, members are encouraged to take the opportunity, if they have not already done so, to use the NASUWT on-line lobbying facility which can be found on the website to send a letter to their MP seeking their support to oppose the pension changes –a template letter is provided to support your representations. The extensive NASUWT Pension Campaign materials are on the website. The NASUWT remains committed to industrial action to defend teachers’ pensions.