Five years too far
Ralph Surman, deputy head of Cantrell primary school in Bulwell, Nottingham and a keen amateur musician, would rather play the piano for a living once he reaches 60. That's still 22 years hence but, at 38, he is not impressed by the idea that flexible retirement may be one way of sweetening the pill of working until 65.
The Green Paper in November 2002 said that people should be encouraged to phase in their retirement, supplementing pensions with earnings instead of facing the traditional "cliff edge" approach to stopping work. One option might be to allow teachers to work part-time while drawing some of their pension, according to proposals being considered in a review of the Teachers' Pension Scheme.
"Teachers might be able to work three days a week and draw pension for the other two," says Brian Clegg, of the NASUWT, the second biggest union.
"Flexibility would encourage more teachers to work longer rather than making people feel they are being forced to carry on until 65."
Another possibility would be to relax the earnings limits imposed on those who take another teaching job after retirement. Under existing rules, your pension can be cut if you earn more than a certain amount.
But some teachers would rather switch careers than carry on beyond 60.
"There is only a certain amount you can give to teaching before it kills you," says Jovann Trkulja, an ICT specialist at Hampton community college in Richmond, London. "A former colleague died within six months of retiring at 65 and I do not want to drop dead in the classroom."
Mr Trkulja, 35, is considering driving Tube trains rather than staying on until 65. "The pay is better and, when you take your train in, that's it, whereas teachers are still working until 10pm or later."
But there are alternatives. "Flexible retirement would be one way of retaining people who still have something to offer," says Mr Surman at Cantrell school, "but it would depend on how much pension you were allowed to draw. I'd feel more attracted to playing the piano away from the stresses and strains of teaching."
He believes the incentives to stay on would have to be considerable to compensate for the demands of the job. "It is very intensive," he said.
"It's like doing three matinees a day, then preparing for another three for the following day. People get worn out - they don't want to be chained to the job until they die."
Despite paying additional voluntary contributions (AVCs), and making other savings, Mr Surman will have to work until 65 to qualify for full pension benefits. He says that teachers are increasingly aware of the need to save for retirement: many younger colleagues are putting the maximum amount into their AVCs. One of his main concerns about the changes is that teachers are losing their best perk. "The solid Rolls-Royce scheme is rapidly becoming a clapped-out old banger," he says.
Another union, the ATL, shares his anxiety. "Making such changes will alienate public servants among whom morale is fragile, and will make public service a less attractive option," says Gerald Imison, its deputy general secretary. "Teachers will be more likely to leave earlier to establish a second career well before retirement."
Growing problems with private sector pension schemes have made teachers' inflation-proofed pensions a valuable incentive. Last year, only 40 per cent of private companies offered new employees a final-salary pension - based on earnings in your last two or three years - compared with 72 per cent of public sector employers. Overall, more than 70 per cent of final-salary schemes are now closed to new entrants. The Association of Consulting Actuaries has warned that this could grow to 85 per cent within two years.
Despite the changes, the teachers' scheme is still better than any private option. But the unions would like to see improvements to bring it in line with other public sector schemes such as the civil service. They argue that the pound;350 million annual savings from raising the pension age should be used to boost benefits.
Providing for unmarried partners is one of the main reforms under discussion. Mike Beard, of the National Association of Head Teachers, says this is long overdue. It was introduced last year for civil servants, although they now have stricter ill-health retirement rules and raised contributions 2 per cent; those who have opted for better pensions contribute 3.5 per cent of their salaries compared with 7.4 per cent paid by teachers.
Other suggested improvements include more generous death-in-service and children's benefits and the automatic inclusion of part-timers; news was expected this week. But Brian Clegg warns that teachers are in danger of alienating other employees. To ensure unity, the TUC is launching a co-ordinated campaign among public sector workers to oppose the move to 65.
The most important issue, according to Mr Clegg, is restoring confidence. He is worried that, if today's teachers opt out, it could be difficult to fund the pensions of those who have already retired.
"The TPS is a notional scheme which the Treasury treats as a pay-as-you-go system," he says. "If teachers start opting out, we could be left with too little income to pay for current pensions."
The unions are convinced that nothing is more likely to destroy confidence and drive teachers away from the classroom than changing the terms of pensions halfway through their careers.
pensions boost, news, page 3
New teachers from September 1, 2006 will have to work until 65 to qualify for a full pension. Changes effective from 2013 mean teachers under 50 on August 31, 2003 will also be affected.
For example: Bill and Bella are two 48 year-old teachers each with 20 years' service up to August 31, 2013. At 60, they can retire and claim the benefits on 20 years' service. For the 12 years after 2013, Bill decides to claim these benefits at 65 which means he gets the full amount.But Bella wants to take the money at 60, so her pension and lump sum for those 12 years will be actuarially reduced.
Source: ATL. Further information at www.askatl.co.uk