Senior staff will be able to step down to less onerous jobs without jeopardising their pension and part-time teachers will receive a boost as the Government starts its review of pensions.
New regulations to be laid before Parliament next week will allow teachers and lecturers over the age of 50 to exchange high-pressure posts for less demanding ones. As long as they continue to pay the higher pension contribution, the final settlement will be based on the higher salary.
Kerry George, senior assistant secretary, of the National Association of Heads, said: "This is a helpful development. It allows heads or senior staff to take on fewer responsibilities and return to classroom teaching or another job at the end of their career." The teacher unions believe this could reduce the cases of premature retirement through ill-health or stress.
Another regulation will mean an enhanced pension for 64,000 part-time teachers, based upon their last year's salary. Those who work the fewest hours a week can expect to gain the most.
Sue Johnson, head of pensions at the Association of Teachers and Lecturers, described it as a "long-overdue improvement for part-timers".
The Government says gains for part-timers are also significant. A teacher who was working 0.4 of a full timetable, retiring on point 9 of the scale at the end of the year will have his or her pension based on a salary Pounds 482. 46 higher than under the old system. This equates to about Pounds 150 more a year, and Pounds 450 more on the lump sum for teachers with 25 years pensionable service.
The Government has set up a working group of Department for Education and Employment pensions experts, employers and unions to review the teachers' scheme. Ministers say they want it made more attractive to win recruits to the profession.
Teachers' pensions came under attack from the previous Conservative government. Its proposals - later carried out by Labour - made teachers' employers responsible for the pension costs of early retirement.
The National Association of Schoolmasters Union of Women Teachers blamed mismanagement of the pension fund for the crisis when senior teachers rushed to beat the deadline for taking early retirement.
The union will be pressing the new working group to move from a notional fund (where the money goes to the Treasury which then honours the pensions) to an actual fund. It claims that if the teachers' pension scheme had been invested as an actual fund it would be Pounds 22.35 billion richer.
The union will also press for teachers' pensions to be paid to their long-term partners and not just spouses.
A more controversial move would be to separate the pension schemes covering schools, further and higher education. Local authorities will argue that they should not be responsible for FE lecturer pensions.
Stephen Byers, school standards minister, said: "In the past the teachers' pension scheme has been neglected. This has to change. I want to see a teachers' pension scheme in place which provides a positive contribution towards making teaching an attractive profession.
"We must develop a pension scheme which meets the needs of teachers. A scheme which is fair, flexible and attractive in contrast to the present scheme which is rigid and out of date."
Brian Clegg, assistant secretary of the NASUWT, said: "It is a teacher's final salary, on which pensions are based, that needs to be addressed, not just tinkering at the edges."