Hey You! with the Gold-Plated Pension!

Who? …..Me?

No! …..You!

“ Pensions Apartheid ” “Unfair and Unaffordable” The Blame Game

The Real Agenda The Government plans to make the biggest real terms cuts in public spending since the 1920s 80% of the cost or removing the deficit will be public spending cuts with 20% being tax rises Most economists question the wisdom of such large and rapid cuts Most of the savings in education will come from cutting the pay and pensions of teachers and other staff

Cuts £99 billion per year less public spending by Total education spending is £89 billion Total spending attributed to schools is about £65 billion This includes teachers’ pensions and BSF BSF and other capital programmes were £6.5 billion in Non-school education spending being cut by 25% over 4 years – front loaded School cash per pupil frozen plus cuts of some grants

Their Fault, Why Should We Pay?

Public Sector Pensions The total value of public sector pensions is less than 2% of GDP and will fall in the medium term Public sector schemes have reviews to ensure that they pay for themselves from employer and employee contributions in the long-term Most of the highest pensions are in the private sector – that’s where the real “apartheid” is, because most lower paid workers in the private sector have no scheme at all Most local government workers have pensions of less than £5000 per annum The average teachers’ pension in payment is less than £10,000; only 5% are over £20,000

Affordable Source: Hutton Report Note: The fan chart shows how the projections would be affected by altering assumptions about productivity growth, public service workforce growth and life expectancy

Current Teachers’ Scheme Some service before 2007 PENSION – Normal Pension Age 60 (80ths)  Final Average Pay (UPS3): £36756  Membership:35 years x 35 years = Pension x 35 years = Lump Sum (tax free) 3/80 These are at Age 60

Current Teachers’ Scheme Service only from 2007 PENSION – Normal Pension Age 65 (60ths)  Final Average Pay (UPS3):£36756  Membership:35 years x 35 years = At age 65  Pension : £21441  Lump sum: £1 commutation for £12 At age 60 (actuarially reduced):  Pension: £16145  Lump sum: £1 for £12

Current Teachers’ Scheme OTHER BENEFITS:  Survivor benefits are paid to spouses, children, registered civil partners and specific related financial dependants.  Long term pensions are paid to adult survivors at rate of 1/160 of final average salary for each year of reckonable service.  Children at the rate of 1/320 up to a maximum of 1/160 for 2 or more children.  Death in service lump sum payment.  Ill-health retirement pension.

Teachers’ Pensions Affordable TPS was reformed to reduce costs in 2007 normal pension age raised for new entrants higher contribution rate of 6.4% for all cost-sharing agreement limits employers’ contribution to 14% Contributions and benefits balance out in the longer term, as an actuarial review was about to show cutting our pensions is a political choice, not an economic necessity

Highway Robbery Part 1 - Indexation Teachers’ Pensions currently go up each year in line with increases in the Retail Price Index From April the Government wants them to increase in line with the Consumer Price Index The CPI is deliberately constructed to produce lower apparent inflation On average it measures inflation at 0.7% less per year Over the average lifetime this knocks £70,000 off the value of a £20,000 per annum pension

The Human Shield Present Government established a Public Services Pensions Commission chaired by John Hutton, former Labour minister Remit – “the growing disparity between public service and private sector pension provision” BUT – only looking at public sector Unaffordability of pensions misleadingly talked up Commission reported in March 2011

Highway Robbery Part 2 Work Longer! Get Less! Pay More!

Work longer… 1. Normal Pension Age of 65 for future service for all teachers as soon as the scheme can be changed 2. “Increase the member’s Normal Pension Age in the new scheme so that it is in line with their State Pension Age” i.e. 66 by 2020 or earlier (for teachers who are 56/57 now) 67 by 2036 or earlier (for teachers who are 40/41 now) 68 by 2046 or earlier (for teachers who are 30/31 now)

Get less……..A Lot Less! Indexation - RPI to CPI breaches “accrued rights” promise reduces the total value of your pension by 13-14% over an average lifetime Raising Normal Pension Age If you are 50 year now on UPS3 and in the scheme before 2007 then retiring at 60 you would lose £1500 per year “Career average” not “final salary” pension Further reduces the value of the pension of any promoted teacher. Each year’s salary revalued in line with average earnings

To Be Continued Other points in Hutton’s final report 1. Exclusion of some groups from public sector schemes, who might include teachers in privatised services and private schools 2. Making employees such as teachers pay more so that employers can pay less 3. Valuing pay-as-you-go schemes such as ours differently to justify making us pay more 4. Worsening public sector pensions so that it is easier for private contractors to bid to run public services

Osborne Couldn’t Wait Osborne had already a assumed a 3.5% contribution increase phased in from 2012 as part of his Budget package to reduce public spending Effect of 3.5% extra £61 per month for NQ teachers £102 per month for UPS3 teachers Unions have been invited to say how this could be achieved! Tiered contributions, as in local government?

Effect of Pay Freeze and Increased Pension Contributions 2.3% Pay rise September 2010 – inflation 4.6% 0% pay rise September 2011 – inflation expected to be 3.5% 3.5% extra pension contributions phased from April % pay rise September 2012 – inflation expected to be 3% Net result: 12.3% fall in real income while at work Pension changes likely to reduce average income by a further 20% in retirement

Lifetime Cost – More than £100,000 Implemented before the end of this Parliament

An Injury To All Teachers are not the only ones whose pensions are under threat Nor is it only other public sector workers The RPI to CPI change will hit the state pension Everyone will be affected by the accelerated rise in the state pension age Most private sector schemes are likely to be worsened by the RPI to CPI change People with the least pension provision will also be affected by welfare benefit cuts

Fighting Back To Do Now – your MP - Get your colleagues to do the same To Follow – petitions, lobbies, school motions Demonstrate on March 26th Joint Industrial Action with other unions In the NUT and other unions saw off Government threats to slash our pensions We succeeded by standing together and being prepared to take action

Members Should Be Angry They Should Act On Their Anger This Is A Very Big Injustice That Has To Be Fought Now Or We Will Pay A Heavy Price For The Rest Of Our Lives