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What if they restore the Final Salary...

Discussion in 'Retirement' started by diddydave, Dec 21, 2019.

  1. diddydave

    diddydave Established commenter

    In light of the interim decision on the firefighters to restore them back to the Final Salary (FS) scheme I've had a look at yet another scenario and compared the two schemes...

    A UPS3 teacher born on 1/9/1965 looking to go this Summer with 30 years service, aged 55 taking actuarial adjusted benefits on both schemes.
    They will have moved to the Career Average (CA) scheme on 1/04/2015.

    So I've looked at their pensions thus:
    1) All their service being put back on the FS scheme (the possible proposed restoration)
    2) Their service being the mix of both based on a transition on 1 April 2015 (the current situation)

    1) Pension: £12,935.51. Lump Sum: £38,806.54
    2) Pension: £12,846.55. Lump Sum: £31,793.01
  2. Prim

    Prim Occasional commenter

    I'm guessing that you will be a lot better off if you have gained promotion and retained it by the time you decide to retire especially on the FS scheme.

    It will be different for everyone especially if you joined the scheme in 2010/11 then the benefits will be very different. It also depends upon whether or not they only extend this to 2022 or beyond.

    I also wonder if they will give members a choice?

  3. HannahD16

    HannahD16 New commenter

    Why no comment from teaching unions to at least highlight what they will be demanding on our behalf?
  4. heldon

    heldon Occasional commenter

    Teachers unions should have been keeping members in the loop, if not then why not? Write to them and asknthem, if enough do this they may respond!
    Prim and HannahD16 like this.
  5. sci

    sci New commenter

    Thank you this seems to explain why my lump sum amount has decreased during the last six months. I advise all tapered members to check their statements.
  6. diddydave

    diddydave Established commenter

    ...and to see if opting out to freeze the best 3-in-10 would be a good idea!
  7. coolhands

    coolhands New commenter

    I suspect no one in the unions understands it enough
  8. diddydave

    diddydave Established commenter

    ...Unfortunately the race-to-the-bottom led by the private sector made public sector pensions a prime target; combine that with how little those who will benefit from them understand them, the divide and conquer tactic of the transition aspect of the scheme and how far in the future they are to the majority it was hard to convince anyone to take significant action at the time the changes were implemented.

    I would also add in to that how the public's perception has been swayed by the reporting of the issue has focused on the 'cost' to the government - such as it's going to *cost* them £4bn to put right when in fact this is simply the figure that the government had hoped to *save* by removing, some would say stealing, it from the public sector's pay package.
  9. letap

    letap Occasional commenter

    The problem is that Pension liabilities - which are difficult to calculate are based upon on bond/gilt yields. These have dropped a lot over the last 10 -15 years, hence the cost of servicing a defined benefit scheme has greatly increased. Although there is no pension pot - the government want the employers - the schools to cover the effective shortfall - hence the huge 23% contribution.
    There are also huge liabilities with the state pension. There will be a day of reckoning for both the TPS and the state pension. If today's 60 year olds are struggling - god help the millenials when they eventually retire.
  10. Treacle3

    Treacle3 New commenter

    Diddydave, I think your first paragraph was spot on... Combined with the teaching profession's general "apathy" towards action of any kind suggested by their unions nowadays. Unlike the Fire Service, for example - which is why they have led this impressive campaign against the Govt pension changes.
    Unfortunately, there is a perception among many teachers (younger ones especially if I may generalise from my own experience) that the unions are there merely to work on their behalf - not that they are part of the union themselves. Any union is only as strong as its members. As a former local union "activist" myself, I know how difficult it has been to galvanise members into taking any type of formal action about pay/pensions/OFSTED/SATs/workload etc... The unions are there to orchestrate campaigns - but can do little when their members are so reluctant to become involved. The Govt perceives the teaching unions (rightly) to be relatively weak because of this. Hence all the negative changes over the last 20 to 30 years. Nothing will significantly change unless the "silent majority" of teachers stand up for themselves.
    Prim and Dorsetdreams like this.
  11. HannahD16

    HannahD16 New commenter

    I couldn’t agree more. The older I get the more frustrated I am at how our profession has allowed itself to be reduced and controlled to the extent that it has been. Other professions would never have allowed this to happen imho
  12. Prim

    Prim Occasional commenter

    and in fact has to be bailed out by another profession. I'm almost no I am ashamed :(
  13. Dorsetdreams

    Dorsetdreams Occasional commenter

    I think that the legal system has suffered even more than education.
  14. HannahD16

    HannahD16 New commenter

    I don’t know enough about the legal system to comment on it but surely Ofsted creep, more and more “accountability”, govt policy interference in the curriculum, relentless assessment and performance comparisons between schools’ headline data etc etc. No wonder youngsters are turning away from it in droves. I can’t think of another profession where the govt would decide what you would deliver to your “clients” each day yet that’s what has happened in teaching.
    Sorry for the rant!
  15. cornflake

    cornflake Senior commenter

    I wonder, given the rate of attrition in the profession, if "youngsters" are less bothered about the pension than they might otherwise have been... they know they are not likely to be in the scheme for long.
    PeterQuint likes this.
  16. heldon

    heldon Occasional commenter

    I think the days of people spending 30+ years at the chalkface are coming to a close!
    PeterQuint likes this.

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