Changes to ill-health retirement rules could help younger staff. But older employees may not be so lucky. Susan Johnson reports
Currently, in order to receive ill-health retirement, a teacher must be judged never able to teach again. Teachers who are awarded ill-health retirement automatically receive "enhancement of service". This means they are credited with extra years of service, the cost of which is met by the Teachers' Pensions Scheme.
Enhancement is complicated, but most teachers receive six and two-thirds years of extra service in addition to the pensionable service they have already earned. This is provided they could have served at least another six and two-thirds years before the day preceeding their 60th birthday. For example, a teacher aged 50 would receive six and two-thirds' extra years, but a teacher aged 54 years and 364 days would only receive five years'
enhancement as this is all she could have worked if she remained in service until the day before her 60th birthday. Teachers with less than 13 and two-thirds years of pensionable service may be treated more generously.
As part of the proposed changes to the TPS, the Department for Education and Skills would like to introduce a two-tier system of ill-health retirement. The first tier will be for teachers judged never able to teach again, but capable of undertaking some other form of work. They will receive no enhancement. Their benefits will be based on the pensionable service that they have accrued up to the date of retiring. These pensioners will not be reviewed by the DfES if they undertake any work outside teaching.
The second tier will be for teachers deemed incapable of undertaking all forms of work. They will receive enhancement equal to one half of the service that they would have completed had they remained in teaching until normal retirement age - age 65 if the DfES goes ahead and raises the earliest age at which full pension benefits can be drawn.
The proposed new arrangements for those who fall into the second tier would be beneficial for younger teachers unfortunate enough to become unfit for all forms of work. For example, a teacher who is awarded ill-health retirement aged 35 would receive about 15 years enhancement - better than under present arrangements.
The majority of teachers who retire sick are in their 50s and would not benefit much from the changes. In 200304, 2,272 teachers retired on ill-health grounds. Of these, 1,938 were over 50. Some of these would be worse off under the proposed arrangements, even if they were unfit for all forms of work.
It is estimated that about 50 per cent of teachers currently awarded ill-health retirement would be considered fit for a job outside teaching, even though this work may be limited and not pay much. In some areas of the country they may not even find work despite the fact that they may wish to do so.
The teacher unions are opposed to new arrangements which could result in at least half of ill-health retirees being worse off. In some cases, it will have been teaching that caused the teacher's health to break down yet they will receive no compensation for this other than immediate payment of their accrued benefits.
The proposed new arrangements risk causing distress to many teachers, particularly those retiring on the grounds of mental illness, often brought on by the stresses of teaching. Such teachers are likely to be suffering from a severe loss of confidence. They may believe that they will never be able to work again even though, in time, they may be able to.
Susan Johnson is head of pensions at the Association of Teachers and Lecturers