The Government announced in late 1996 that it was no longer prepared to continue paying the full cost of teachers taking early retirement.
Since 1987, the numbers taking this route out of teaching had soared from about 9,000 to 13,000 per year - so that nearly three times as many staff were retiring prematurely as on age grounds. The changes were initially proposed for April 1997 but were delayed until September following an outcry from teachers expecting to retire last summer.
Employers now pay a share of each teacher's lump sum and annual pension with the employer's share decreasing as staff get older.
The sums payable depend upon how long a teacher has served and their final salary. Nobody under 60 can draw money from the government-run Teachers' Pensions Scheme until an LEA agrees to pay its share as well.
A teacher aged 55 years and six months who is retiring after 26 years' service and is earning Pounds 22,000 would be entitled to a lump sum of Pounds 21,450 and an annual pension of Pounds 7,150.
Most of the lump sum (Pounds 18,147) comes from the Teachers' Pensions Scheme, with the employer contributing Pounds 3,303. The scheme would pay Pounds 5,370 towards the annual pension and the employer would add the remaining Pounds 1,780.