PENSIONS CAMPAIGN UPDATE FEBRUARY 2012

Current position Government continuing to press for cuts in teachers’ pensions. Government concessions on 2 November were welcome - but not enough NUT action on 30 June and threat of 30 November action helped to secure concessions Government ‘ final offer ’ on 19 December involves no new money – but some repackaging NUT remains in negotiations with Government but preparing for further national action if we do not make sufficient headway

Why haven’t we accepted the Government’s offer? The Government still wants you to pay more, work longer and get less during retirement Despite the Government ’ s claims, our pensions are affordable

Key elements of Government 19 December offer Switch from final salary to career average increase in the normal pension age (the age at which pensions can be taken in full), to state pension age accrual rate of 1/57th of pay per year of service (up from 1/60); built-up pension for serving teachers to be revalued annually by CPI inflation per cent (down from national average earnings); pensions in payment to be increased with CPI inflation; improved early retirement terms – pension reduced by 3 per cent a year for members with pension ages beyond 65 for the difference between their normal pension age and 65

Pay More Government plans 50% contribution rise, from 6.4% to an average 9.6% by 2014 Increases start from April 2012 Salary Band (FTE) Contribution rate in Increase from current 6.4% Up to £14, %0% £15,000 - £25, %0.6% £26,000 - £31, %0.9% £32,000 - £39, %1.2% £40,000 - £74, %1.6% £75,000 - £111, %2.0% Over £112, %2.4%

Work longer Scheme pension age to be linked to State pension age –Under 34? Work till 68 for a full pension –Aged 34 to 50? Work till 67 –Aged 51 to 54? Work till 66 Transitional protection if within 10 years of current pension age (see later) Pension age may be even higher in future – 70+ for youngest teachers?

Get Less Career average means less for vast majority of teachers Accrual rate of 1/57 of average salary per year but Lower ‘revaluation rate’ means your pension will lose ground against average earnings over period to retirement CPI inflation link takes £35,000 from teachers with £10,000 pension

Transitional protection Teachers within 10 years of NPA on 1 April 2012 stay on existing FS scheme Teachers up to further 3.5 years away have tapered protection NPA60 scheme member Age at April 2012 Age when moving to new CA scheme 50 Stays in FS scheme years 6 months - no protection

What will I lose? Use the updated NUT pensions calculator at to see: How much you ’ ll lose from your take home pay How long you ’ ll have to work for your full pension How much you ’ ll lose from your pension if you still retire at your current pension age How much you ’ ll lose over a 25 year retirement due to lower pensions and lower indexation If you ’ re 50+ at 1/4/2012 – you stay with current pension and retirement age, but you ’ ll still pay more and lose out from lower indexation

Are our pensions affordable? Yes – the TPS has already been reformed as a result of our agreement in 2006! Reliable sources show the costs are already falling as planned We ’ ve agreed to pay more – but only if the increase is justified, not to help pay the costs of the recession Teachers ’ pensions aren ’ t “ gold plated ” Continuing our campaign will strengthen our hand in our negotiations and persuade the Government to move further

The real pensions problem The private sector Two-thirds of workers have no scheme 90% of final salary schemes are closed Employers’ contributions cut by more than half The result – higher costs to the State and future taxpayers Cutting public sector pensions just makes everyone poorer in retirement We need decent pensions for all!

What happens next? NUT remains in negotiations with Government around 19 December offer and outstanding technical issues NUT in discussions with other unions on further national action Priority issues = pension age and contribution hikes

What you can do Hold a workplace meeting – open to all Use the pensions loss calculator at View the powerpoint, briefings and video at Recruit any non union members to the NUT Good luck and thanks!