It's time to rethink pensions

25th January 2013 at 00:00

Following on from the piece in TESS two weeks ago, which considered the implications of proposed increases to employee pension contributions, I wanted to highlight the need for everyone responding to the consultation to call on the government to think again.

The UK government decided that public-sector pensions needed reform without first doing a scheme valuation. They also decided that before the redesign it was necessary that teachers should pay more into pensions and those in receipt of a pension should get less (changing the revaluation factor from the retail price index to the consumer price index).

The Scottish government has been clear in its condemnation of the UK government's decision to increase pension contributions but claims that, owing to the budget squeeze and HM Treasury rules, its hands are tied.

Now we are all invited to respond to a consultation on another round of employee contribution increases - increases which have: not been justified by a scheme valuation; come on top of a pay freeze; follow increases last year; precede a promised increase next year; will be overlaid by a revamped pension scheme which will offer less value, despite increasing pension age; and will no doubt be subject to further scrutiny if the opt-out to the State Second Pension is removed in 2017 as planned.

In responding to this latest consultation, I would urge everyone to make clear that they are opposed to any increase. After that, I realise that we may have different views about how any increase should be applied if the Scottish government is determined to implement it.

The AHDS union agrees that the lowest paid in the profession should not face any further increase in contributions and believe that the threshold of #163;25,999 proposed in the government's consultation should offer a good insurance against opt-outs. Beyond that level, we believe that there should be a flat-rate percentage increase in employee contributions - just as any salary increase is agreed on a flat rate for the profession as a whole. We are clear in our view that this is the fairest approach to implementing this wholly unfair increase in contributions.

We have headteacher members who have been hit in recent years by the loss of tax credits, a tiered increase in pension contributions last year and the removal of, or reduction in, child benefit this year. It is easy to understand their frustration and bewilderment when they are faced with the prospect of further tiered increases. Some tell me that they were better off before taking up a headship some years ago. This can only worsen the significant problems faced by councils trying to recruit heads.

Perhaps the time has come for the Scottish government to look again at whether it can plug the gap or find the resource to help local government to offer a better salary settlement for 2013 to offset these UK government-designed increases?

Greg Dempster, AHDS general secretary.

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