The new deal under negotiation
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The new deal under negotiation
https://www.tes.com/magazine/archive/new-deal-under-negotiation
The results are expected by June. The main proposals include:
* A more generous method of calculating benefits. At present, staff receive a pension of 180th of their average salary for each year of service , together with a tax-free lump sum of 380ths. The DfES suggests that pensions should be calculated on 160th of salary plus the option of taking 25 per cent of the pension as a tax-free lump sum.
* A more flexible approach to retirement. This might involve teachers being able to take some of their pension benefits while working part-time or taking a post with less responsibility.
* A tightening up of the regulations on ill-health retirement. The DfES is proposing a two-tier system of ill-health retirement which would mean that only those who are too ill to work at all would receive an enhanced pension. Anyone who can take a job outside teaching would not be credited with any extra pension.
However, young teachers who become too ill to work would receive more generous retirement benefits.
* An increase in the death-in-service benefit from to two to three times’
salary. However, the DfES has indicated that teachers might be expected to make higher pension contributions to qualify for this.
* Increased flexibility over pension top-ups such as buying in additional years of service or “past added years”. Today, tax relief can only be received on additional pension contributions of up to 9 per cent of salary.
The DfEs is suggesting that this limit should be increased.
* Dependants’ benefits would be paid for life. Under today’s archaic rules, teachers’ widows and widowers lose their pensions if they re-marry.
LEGISLATION THAT WILL CHANGE YOUR PENSION
New laws affecting pension rights will definitely impinge on teachers .
* Now that civil marriages for same-sex partners have been legalised, the DfES has introduced pensions for civil partners.
* In line with the Finance Act 2004, from April all teachers will be allowed to take 25 per cent of their additional voluntary contributions (AVC) fund as a tax-free lump sum, instead of using all of it to buy an annuity. As long as annuity rates remain disappointingly low, this represents a welcome option financially.
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