Plans to raise the pension age

6th October 2006 at 01:00
The two largest teaching unions in Scotland have endorsed plans to raise the pension age for new teachers from 60 to 65.

Both the Educational Institute of Scotland and the Scottish Secondary Teachers' Association say the changes will offer increased benefits and flexibility as well as safeguarding the link to final salary.

Consultation on the proposals was launched earlier this week for Scottish teachers. A similar exercise south of the border attracted a very low response -only 149, of which 98 were from registered teachers, out of a potential teacher workforce of 600,000.

Existing teachers will retain a pension age of 60, while new entrants from April 2007 will have a pension age of 65, but will benefit from improved accrual rates.

Other changes will allow for phased retirement and more choice over lump sum benefits.

Ronnie Smith, general secretary of the EIS, said: "This is a balanced package of reform which, crucially, retains a defined benefit scheme, linked to final salary.

"The changes, together with modest increases in contributions from both teachers and employers, should address the problem of rising costs and result in an affordable and sustainable scheme for years to come. The EIS will encourage its members to respond favourably to the consultation now underway."

David Eaglesham, SSTA general secretary, said: "This is something that has to be commended to members. It gives them a great deal of protection and, in the current climate, that is something which is very valuable."

Existing members, who retain the normal pension age of 60, will have their pension arrangements modified and improved in a number of ways, including: Under the plans, the minimum retirement age will be 55 by 2010, except on grounds of ill-health. Benefits will be calculated on whichever is the higher of the last year's salary or the best three consecutive years'

salaries, during the final 10 years of service.

There will also be more scope to take a higher tax-free lump sum and a lower level of pension. And phased retirement arrangements will allow teachers to continue working while drawing down some or all of their pension benefits.

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