Perks may not ease pensions worries

Graeme Paton

Ministers today outlined a series of new benefits being added to the teachers' pension scheme in a bid to placate unions over retirement age changes.

The Government plans to increase public-sector workers' retirement age from 60 to 65, which it says will create greater flexibility and choice.

Unions warn the move will drive teachers from the classroom and could leave many struggling financially later in life.

In a consultation document published today, the Department for Education and Skills outlined perks it hopes will win over critics.

Under the Government's proposals, dependants' benefits would be extended to unmarried partners and teachers would be able to choose how much to take as a lump sum. The Government said it would also consider allowing teachers and further education lecturers to draw some of their pension while continuing to work part-time.

While additional benefits were welcomed by the unions they warned that they would not ease fears over the retirement change.

The perks came as public-sector unions rounded on the Government at the Trades Union Congress in Brighton this week. Delegates voted to resist government plans to raise the pension age to 65 for public sector workers.

Later Alan Johnson, the new work and pensions secretary, told the TUC that the Government would boost employee representation on pension schemes, and ruled out raising the state pension age, but did not make any concessions on the public sector plans.

Barry Fawcett, head of pensions at the National Union of Teachers, said:

"We are supportive of the flexibilities the Government is talking about but teachers are still strongly opposed to working until 65 in the future to get their full pension benefits."

The Association of Teachers and Lecturers says reform will lead to an early exodus from the profession. Its general secretary Mary Bousted said: "Many teachers, rather than retire at 60, will leave at 35, 36 or 37 and start a new career where they can build up a second pension. This will have a significant impact on teaching numbers and supply."

Professor Alan Smithers, from Buckingham university, said: "It seems to me that the Government is proposing a series of sensible incentives over and above what is already a very generous pension scheme. In the short term there is the possibility that existing teachers may leave the profession prematurely, before the arrangements come into place for them in 2013. But in the longer term I cannot see it having much impact."

The Government has stressed that teachers will not lose their existing pension entitlements as a result of changes to the retirement age. But planned reforms will mean that benefits payable on additional pensionable service earned after the changes come into effect will be reduced if teachers decide to leave at 60 rather than 65.

The Government plans to introduce the changes in 2006 for new teachers and 2013 for existing members of the pension scheme.

Leader 22

Consultation on the changes starts today and runs until December 10. The document can be found at

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Graeme Paton

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