Pensions overhaul will trigger exodus of staff

18th March 2011 at 00:00
Unions expect a "surge" of people in their 50s to leave in the next five years

A proposed overhaul of the teachers' pension scheme will lead to an exodus of experienced staff and put newcomers off the profession completely, union experts have warned.

Unions say they expect a "surge" of people in their 50s to leave the profession in the next five years because they will feel it is "simply not worth" continuing to work for reduced pension benefits.

A major review of public sector pensions by Lord Hutton recommended last week that workers retain final-salary benefits made on pension contributions until "the end of this Parliament". However, it said payouts on contributions after that should be calculated on a lower career-average basis.

The review also called for the age when teachers access their pensions to be brought in line with the state pension age, which is due to go up to 66 by 2020. The pension age for teachers is currently 60, or 65 for anyone who entered the profession after 2007.

The Government is expected to respond in full to Lord Hutton's proposals later this spring, but has already set out plans to change public sector pensions.

From next month, payouts will be calculated using the generally lower Consumer Price Index inflation measure instead of the Retail Price Index. Teachers' pension contributions are also set to increase by about 50 per cent over the next four years.

Martin Freedman, head of pay and pensions at education union the ATL, said: "There would not really be much motivation for these older teachers to carry on.

"It's all very well for Hutton to say people are living longer so this has to happen, but older people still get angina and arthritis and other age- related conditions that might stop them standing up in front of a class."

David Binnie, pensions consultant for the Association of School and College Leaders, said: "People feel that the last thing they want late in their career is having their pension messed about with. It may dissuade teachers from going from a deputy headship to headship, or maybe taking on a federation."

Russell Hobby, general secretary of heads' union the NAHT, said pension scheme changes would make the profession less attractive to newcomers.

Meanwhile, the Independent Schools Council is calling for assurances that teachers in private schools will still have access to the teachers' pension scheme. In his report, Lord Hutton said it was in principle "undesirable" for private sector workers to be signed up to public sector schemes.

REVIEW - Hutton's hopes

- All "accrued rights" should be protected. Pensions based on contributions made up until the changes come into effect will be paid out on the existing terms.

- A final-salary scheme should be replaced by a "career average" by "the end of this Parliament".

- Public sector workers should get their full occupational pensions at the same age as their state pension.

- Members should have "greater choice" over when to start drawing part of their pensions. Flexible retirement, with people working while receiving pensions, should be encouraged.

Original headline: Pensions overhaul will trigger exodus of older staff, warn unions

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