1. Act Now to Protect Your Pension
March 2011

2. The threat to our pensions
Lord Hutton’s final report on 10 March has set out various options for change – all will cut our pensions
Government decided to attack our pensions even before Hutton’s final report
George Osborne: ‘the public sector pension bill is unsustainable’
Nick Clegg: ‘unreformed gold-plated pension pots … just not fair, not affordable’

3. The current Teachers’ Pension Scheme
Your contribution rate = 6.4 per cent
If you joined in 2006 or earlier
Pension of 1/80 of final salary per year of reckonable service + 3x this as tax free lump sum
Normal pension age = 60
If you joined in 2007 or later
Pension of 1/60 of final salary per year of reckonable service. No automatic tax free lump sum
Normal pension age = 65

4. The case against change (1)
Teachers’ pensions are fair!
The average teachers’ pension in payment is less than £10,000; only 5% are over £20,000
Cuts will hit women teachers hardest
Teachers are saving for retirement – this should be commended not condemned

5. The case against change (2)
Teachers’ pensions are affordable!
TPS already reformed to reduce costs
normal pension age now 65 for new teachers
higher contribution rate of 6.4% for all
cost-sharing agreement limits employer’s contribution to 14%
Costs will fall as planned – cutting our pensions is a political choice not an economic necessity

6. Hutton’s proposals Pay more Work longer Get less
Government says you must pay as much as 9.8% compared to 6.4% now
Work longer
pension age linked to state pension age – currently 65, likely to be 66 by 2020
higher pension age of up to 68 in the long term
Get less
indexation change from RPI to CPI already imposed by Government
pension based on ‘career average’ rather than final salary

7. Pay more… Higher contributions Effect of increase to 9.8%
to make short term savings
to make employer and employee contributions more equal
Effect of increase to 9.8%
up to £61 per month for NQ teachers
up to £102 per month for UPS3 teachers
Tiered contributions – higher paid to pay more

8. Work longer… NPA linked to state pension age for all
pension accrued in future would only be available in full at state pension age
Government already plans SPA rise to 66 by April Will rise to 68 in longer term.
Effect of NPA of 66
50 year old on UPS3 who still retires at 60 would lose £1,300 a year from pension and £4,000 from lump sum

9. Get less… Indexation - RPI to CPI Effect of RPI to CPI
affects all members, in place for April 2011
breach of election promise and accrued rights
Effect of RPI to CPI
a teacher retiring on a £20,000 pension will lose £70,000 over their retirement
“Career average” not “final salary”
pension based on pay across whole career
“fairer” pensions or cost-cutting measure?

10. The real pension problem
Two-thirds of private sector employees are not in any employer-backed pension scheme
87% of private sector final salary pension schemes are closed to new members
Cutting public sector pensions won’t help private sector workers in retirement - we need decent pensions for all!

11. Remember!
The Government wants you to work longer, pay more and get less
By September 2012 the pay freeze and pension contribution hike will have cut your pay by 10 per cent in real terms.
In the NUT and other unions stood together to see off Government threats to slash our pensions. We may need to do so again.

12. What you can do Email your local MP
go to - ask your MP to oppose contribution rises and RPI to CPI
the link to 5 friends - ask them to use it
Support the TUC March for the Alternative in London on 26 March – see
Take part in the Union’s surveys of members’ views on pensions
Talk to colleagues and friends - your pension is fair, affordable and does not need to be cut
Be prepared to vote for action!