Pension bill fuels fear of staff cuts

27th October 2000 at 01:00
CHANGES to the teachers' retirement fund will cost councils an extra pound;600 million, prompting fears of subsequent school staff cuts.

Government actuary Chris Daykin has told Education Secretary David Blunkett that local authorities must pay an extra 4.6 per cent of the payroll into pension schemes.

But the councillors have warned that unless the extra money was made available from central Government, they would have no choice but to cut back on the cash they could make available to schools.

Graham Lane, education chair of the Local Government Association, accepted that the pound;600m calculation was correct but warned it would be impossible for local education authorities to meet that cost without taking money from elsewhere.

And he said: "We are talking about a huge amount of money and unless the Government takes account of this ... it is going to pose a massive prolem.

If the Government does not come up with extra funds, the money will have to come from local education authorities and schools which would mean fewer teachers."

The demand for an increased contribution from councils arises from changes that will improve teachers' pensions.

The changes will also cover inflation and the increased numbers of teachers who are taking early retirement.

Teachers pensions are funded on a "notional" basis, whereby the money comes from the Treasury rather than an investment fund built up from superannuation payments.

In return for better assumptions about the investment return on this notional fund, local education authorities are having to put in more cash.

Councils were due to increase payments to the teachers' pension scheme in 2002, but Mr Blunkett has persuaded the Treasury to put this date back until 2004.

Subscribe to get access to the content on this page.

If you are already a Tes/ Tes Scotland subscriber please log in with your username or email address to get full access to our back issues, CPD library and membership plus page.

Not a subscriber? Find out more about our subscription offers.
Subscribe now
Existing subscriber?
Enter subscription number


The guide by your side – ensuring you are always up to date with the latest in education.

Get Tes magazine online and delivered to your door. Stay up to date with the latest research, teacher innovation and insight, plus classroom tips and techniques with a Tes magazine subscription.
With a Tes magazine subscription you get exclusive access to our CPD library. Including our New Teachers’ special for NQTS, Ed Tech, How to Get a Job, Trip Planner, Ed Biz Special and all Tes back issues.

Subscribe now