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hutton report

Discussion in 'Scotland - education news' started by holdingon, Mar 8, 2011.

  1. holdingon

    holdingon Occasional commenter

    any predictions what this report will contain when released on Thursday and especially what the eventual effect will be for teachers?
     
  2. holdingon

    holdingon Occasional commenter

    any predictions what this report will contain when released on Thursday and especially what the eventual effect will be for teachers?
     
  3. JPM1967

    JPM1967 New commenter

    If we are 'lucky' we will still have a 'defined benefit' pension scheme, albeit with a Career Average calculation rather than 'final salary'. Even this reduced scheme will require higher monthly contributions from teachers and/or employers. The true cost of our current pension plans is closer to 30% of our salaries, of which we only pay 6.4%.
    If we are unlucky, Hutton will propose the scrapping of final salary/defined benefit schemes (bringing us into line with what has been happening in the private sector), to be replaced with defined contribution schemes, leaving teachers carrying all the risk and being dependant on the fluctuations of the stock market.
    If it is the latter I fully expect strike action, although it may ultimately prove fruitless.
    <u></u>
     
  4. JPM1967

    JPM1967 New commenter

    There's an interesting article in The Herald today on this topic:

    http://www.heraldscotland.com/comment/iain-macwhirter/pensions-strike-is-a-big-mistake-1.1090118

    Although it makes uncomfortable reading, I find myself agreeing with Iain Macwhirter's conclusions. We need to pick the correct battles to fight. The current COSLA deal is worth fighting (and striking for) but I honestly feel the Hutton Report is fair, and in the circumstances an offer we should reluctantly accept. We will get no public sympathy whatsoever over fighting to retain our existing pension scheme, the terms of which most workers can only dream of these days.
     
  5. JPM1967

    JPM1967 New commenter

    http://www.heraldscotland.com/comment/iain-macwhirter/pensions-strike-is-a-big-mistake-1.1090118
     
  6. GuessWho

    GuessWho New commenter

    The Hutton PROPOSALS are well worth fighting against.
    If only one of the three main proposals was being suggested it would be bad enough but all three?
    Increased monthly payments (in the order of &pound;100) - in effect a pay cut
    Career average pensions - Lots of talk of revenue neutral - methinks not - I can appreciate the inequity of someone getting an "inflated" pension by gaining promotion near retirement age but these cases a few and far between.
    Increased retirement age - Fancy teaching kids when your 66 or 67 - might be off sick more and only get 90% salary....don't worry a supply teacher on point 1 of the pay scale will fill in.
    It's all linked and we must fight both sets of proposals.
     
  7. catmother

    catmother Lead commenter

    The prospect of still teaching when 66/67/68/70 is grim. In fact,it doesn't really matter what one's job is,private or public sector,on the till in Asda,a building site,an office environment or a classroom. Having to get out of bed/do the commute towork/do a day's work is going to be hard post 60. We might all live longer but those years between 60 and early 70 are the quality years of retirement we all face the prospect of missing out on.A never ending life,spent in the care home staring at the tv screen or being forced to play silly games is not something what I'm looking forward to.
     
  8. holdingon

    holdingon Occasional commenter

    the biggest problem is the change from RPI to CPI ?

    this will make a major dent in you retirement funds

    but add to this increase in contribution -pay freeze change in normal retirement age and phew ???


     
  9. JPM1967

    JPM1967 New commenter

    OK, a question...who do you expect to pay for our teacher pensions if we resist any change whatsoever?

    A quick example...93% of primary teachers are female so let's take one female who has taught for 40 years and retires at the age of 65 on a 2/3rds (40/60) pension of 22,800 p.a. (i.e. 2/3 x 34,200 final salary).

    A similar female with a private pension would need almost 400,000 pounds saved up to buy a pension of 22,800 p.a. (Typical female age 65 annuity rates are 600 pension p.a. for every 10,000 available to spend).

    The female teacher will only have contributed the equivalent of 87,552 over the 40 years (i.e. 6.4% x 34,200 x 40).

    Simple question...Who pays the other 300,000?

    N.B. This excludes the complications of tax-free lump sums, index linking and the fact that such a female teacher could until recently retire on a full pension aged 60...all of which would only make the teacher pension more valuable and expensive to fund.
     
  10. GuessWho

    GuessWho New commenter

    Perhaps you should get your facts correct before trying to either justify or explain why you feel we should accept such radical changes to a pension system we signed up for many years ago.
    As I recall our pension is based on 80ths.....ie max pension will be after 40 years service and will therefore be 40/80 of final salary.
    In your example the teacher would receive a pension of &pound;17100 rather than the figure you quoted.
    Further, NOBODY will get a full pension at 60 (save for the very rare enhanced package).
    Having spent a minimum of 4 years to get a degree nobody would start teaching until around 22 years of age so in your example a retiree of 60 would receive a pension of &pound;16425 which is now &pound;6555 less than your original figure!
     
  11. JPM1967

    JPM1967 New commenter

    Oh dear...perhaps <u>you</u> need to check <u>your</u> facts before you start throwing abuse. Look at:
    http://www.sppa.gov.uk/scot_teachers/retire.htm#pen2

    Since April 2007 new teachers have been in a 60th scheme, not an 80th. Also, new teachers currently retire at 65 (although that may soon increase) so it is quite possible to achieve 40 years (and a 2/3 pension) before retiring.
    So...back to you...who pays for the funding gap. A very simple question.
     
  12. JPM1967

    JPM1967 New commenter

    P.S. I'm <u>not</u> looking for a heated argument. I'm looking for reasoned debate to convince me that we should fight strongly to retain all our existing pension rights.
    To put it in context, there were 101 reasons I left a good business career to take up teaching. Job security (ha!) and a defined benefit pension were definitely factors, so I'll be as upset as anyone if we have to accept an inferior package.
    However, I'm also well aware that my previous private employer closed its final salary plan to new employees some 10 years ago, and has since closed it altogether and moved everyone into a defined contribution / stakeholder plan.
    Ten years ago 88% of all defined benefit private sector pension plans were still open to new members. Today that figure is less than 10%. They have become unsustainable due to low inflation, low interest rates, poor stock market returns and people living longer.
    I thought the Hutton proposals would be far, far worse than they have turned out. They're still offering us a defined benefit plan, and career average will have a minimal impact for the vast majority of teachers.
     
  13. GuessWho

    GuessWho New commenter

    My facts are correct for the vast majority of teachers!
    Perhaps you should check your calculations.
    There has always been a funding "gap" with teacher's pensions.
    Part of the reason for entering teaching was the pension which is an integral part of our wages and conditions.
    Due to the economy situation just now our pensions and conditions are being attacked.
    Should we meekly accept that we must pay for the failings of others.

     
  14. GuessWho

    GuessWho New commenter

    "teachers' pensions"
     
  15. JPM1967

    JPM1967 New commenter

    Just because there was always a funding gap, that doesn't make it right - or sustainable.
    The Hutton Report won't touch a penny of the pension you have already built up. Of course, we all have a choice whether to remain in teaching under inferior conditions. However, I guarantee we'd find it very difficult to find another job offering such a generous pension deal these days.
    The economic situation is a smokescreen, but has probably brought things to a head whereby the government feels it can tackle something it has wanted to change for years. There has been a structural deficit in public sector pensions for decades, which has nothing to do with the banking crisis. That same structural problem was also in the private sector schemes, which is why less than 10% of them remain open today.
     
  16. JPM1967

    JPM1967 New commenter

    Correct. But the proposed changes will have minimal impact on the vast majority of teachers whom you refer to.
    Those aged 50 just now will be 54 by the time Hutton kicks in (2015?) and will have, on average, accrued > 30 years service under the old final salary scheme. This part will remain untouched. They'll then have just over 10 years service where their pension will be calculated on a career average basis. Unless they seek a major promotion (and salary increase) in the last ten years of their working life then their pension will be almost identical under career average.
    The Hutton Report will mainly impact younger teachers, especially those in the 60th plan which has been operating since 2007.
     
  17. baitranger

    baitranger New commenter

    Oh, well that's all right then-NOT.
     
  18. JPM1967

    JPM1967 New commenter

    Excellent...just the reasoned debate I was looking for. Well done!
     
  19. While the above debate rages on, can I just point out that a large proportion of teachers are female and as such will have taken extended periods of time out of the classroon to have their families, they may also be only working part time - therefore less pension. In my own case, I did not start teaching until I was 33 and will have only accrued 27 years by the time I retire; under present calculations I stand to get approximately &pound; 9 - 10,000 a year in pension = Not a huge amount. Most female teachers will not have worked the full forty years and may not even have upwards of 30 years FT teaching, so to suggest that we are going to get a decent pension is a fallacy. Going at this rate pensions might not even exist when I retire.
     
  20. jonowen

    jonowen Occasional commenter

    We will survive.
    Think of Japan, one of the most sophisticated countries in the world - do you think they will be debating pensions?

     

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