Industrial action looms over pension changes
Teacher unions in Scotland and elsewhere in the UK are girding their loins for industrial action over pension changes.
If the coalition Government implements, or exceeds, the recommendations of the Hutton report into public sector pensions, teachers could become part of a UK-wide teacher protest or public-sector union action led by the Trades Union Congress. The University and College Union has already balloted its members on industrial action.
Both the EIS and Scottish Secondary Teachers' Association have warned that the Hutton proposal to move from final-salary schemes to career-average pensions for new entrants would mean a cut in pension payments upon retirement as well as higher contributions and longer working lives.
They have also criticised the Hutton recommendation to link the normal retirement age of all public sector workers to the state pension age - likely to be 67 or 68 in future - as a "one size fits all" approach which fails to take account of the physical and mental strain often faced by teachers.
Ronnie Smith, EIS general secretary, said: "For teachers, the current average pension upon retirement is in the region of pound;10,000 a year. This is far from being excessive, given the many years of service that the majority of retiring teachers have provided . The move towards pensions based on career-average salary will mean a cut in pension on retirement."
Higher contributions linked to lower benefits could trigger an exodus from the pension scheme and increase the burden on taxpayers as state benefits would come under increasing pressure, he warned.
SSTA's general secretary, Ann Ballinger, said the Hutton report had to be seen in the current context of fund contribution rates.
"It is the Government's clear intent to raise employee contribution rates in three stages over the next few years, she said.
"For teachers, this would lead to a contribution rate of about 9.4 per cent - or to put it in more stark terms, an increase of over 45 per cent - at a time when wage increase will be nil or not much beyond that figure."
Pensions policy remains a reserved matter for the Westminster Government, although the regulation of Scottish teachers' pensions is devolved. Technically, it is possible for Scotland to go in a different direction, but in practice it is highly unlikely the Treasury would give its approval for such a variation.
- Linking the pensions of public sector workers to average salaries over their careers, rather than their final salaries, possibly by 2015, to make pensions "affordable";
- aligning the public sector pension age to the state pension age, which will be 65 initially and is likely to reach 68 for men and women;
- uniformed services, such as police and firefighters, working until 60;
- honouring in full the pensions that workers have already built up in final-salary schemes;
- the Government has already accepted a previous recommendation of Lord Hutton that public servants should soon pay higher contributions.