Act Now to Protect Your Pension April 2011

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’

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

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

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

Hutton’s proposals Pay more 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 at least 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

Pay more… Higher contributions 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

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 at least 68 in longer term. Effect of NPA of year old on UPS3 who still retires at 60 would lose £1,300 a year from pension and £4,000 from lump sum

Get less… Indexation - RPI to CPI affects all members from 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?

What will it cost you? Use the NUT calculator at to see: How much you’ll lose from your take home pay How long you would have to work to take your full pension How much you’d lose from your current expected pension, if you nevertheless retire at NPA How much you’d lose in total over a 25 year retirement, due to the cut in your pension and the switch from RPI to CPI indexation

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!

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.

There is an alternative Thousands of NUT members took part in the historic 500,000 strong TUC March for the Alternative on 26 March

What you can do your local MP go to - ask your MP to oppose contribution rises and RPI to CPIwww.teachers.org.uk/pensions the link to 5 friends - ask them to use it Use the NUT pension calculator at 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!