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has the teacher's pension dispute been resolved yet?

(31 Posts)
IthinkIamUndecided Wed 31-Aug-11 09:09:48

Not seen anything in the press recently. Are any further strikes planned?

AbigailS Wed 31-Aug-11 09:19:59

NO!

Feenie Wed 31-Aug-11 09:20:12

Representatives from all unions met in July to plan how best to persuade the government to negotiate - ATL, ASCL, NAHT, NASUWT, NUT, UCAC & UCU - and sent a joint letter.

NUT, ASCL, UCU and ATL, who have already taken industrial action, may take further action in the Autumn if negotiations are not forthcoming.

NAHT and UCAC have already decided to ballot their members for action this Autumn.

NASUWT have said they may also ballot if negotiations fail.

That's every single one, I'm afraid, in schools, colleges and universities.

AbigailS Wed 31-Aug-11 09:21:16

Whoops! Pressed message too early. No! Pensions issues not resolved. Not sure on unions next steps, mine hasn't told us anything yet.

Feenie Wed 31-Aug-11 09:23:08

I am guessing yours is NASUWT, Abigail?

AbigailS Wed 31-Aug-11 09:25:39

Yes

Feenie Wed 31-Aug-11 09:32:19

They've been the most patient so far, but since the government won't negotiate at all, then I would expect them to follow suit - Chris Keates said that back in March, I think.

Am impressed with all the unions working together, it's unprecedented.

GooseyLoosey Wed 31-Aug-11 09:34:26

The Government can't negotiate - it has no money unfortunately.

Feenie Wed 31-Aug-11 09:43:47

Indeed - which is why they would like us to up our contributions - not to pay out pensions though, but to use on whatever they fancy.

The government could also make sure the acturial valuation of the scheme is done, which would show that the scheme is inderperforming - the latest valuation was due in 2010. I wonder why they won't do that? hmm

Feenie Wed 31-Aug-11 09:44:27

actuarial

mrz Wed 31-Aug-11 09:44:51

They have money to buy bombs for Libya

A Guardian report in May quoted defence experts who suggested the total bill by autumn is likely to be £400m-£1bn.

CustardCake Wed 31-Aug-11 10:33:17

When the original strike took place it was always reported as being the first of a series of strikes with more expected in Autumn. The Government and Unions both made it pretty clear they weren't backing down so an Autumn of strikes was reported as almost inevitable.

prh47bridge Wed 31-Aug-11 10:52:39

The actuarial valuation actually started in March 2008 but had not been completed when the current government took office. The valuation was suspended pending the final report of the Hutton commission. That report was published in March. I have no idea whether or not the valuation has been resumed.

I am not fully familiar with the details of this dispute but if part of the proposed increase in employee contributions is to allow a reduction in employer's contributions Feenie is indirectly right in that it frees up some money to be spent on other things, but the employee's contributions themselves will continue to go into the TPS and will only be used for funding pensions.

It is, of course, always possible to point to some aspect of government spending with which one disagrees and suggest it should be spent on teachers' pensions. In my view there are three questions:

- Should the taxpayer subsidise public sector pensions? If the answer to that is no the money the government spends on {fill in the unpopular government spending of your choice} is irrelevant.

- Is it right that the employer's contribution to teachers' pensions is much higher than is typical in the private sector? Most private sector employees are in defined contribution schemes where the typical employer's contribution is around 6%, whereas the employer's contribution to the TPS is around 14%. For completeness I should add that private sector employees in defined benefit schemes see an average employer's contribution of over 16.5% but that is, of course, part of the reason such schemes are relatively rare in the private sector these days. The TPS is a defined benefit scheme.

- Does the TPS have sufficient resources to fund its liabilities?

I am not proposing answers to either of these questions.

GooseyLoosey Wed 31-Aug-11 10:57:48

I am imagining that they cannot finalise the results of the valulation until they have settled what the pension promise will look like going forward. The valuation looks at the funding position of the scheme in relation to its ability to meet future obligations.

TPS will almost certainly not have sufficient money to fund its obligations - this is the position that most occupational pension schemes face - particularly in the light of the down grading of US bonds and the ensuing financial panic.

It is the case that in the face of increasing longevity, existing final salary promises are no longer financially sustainable and need to be revisited. There is a question around the detail of any changes, but the majority of Hutton's recommendations make sense.

mrz Wed 31-Aug-11 11:05:10

Teachers pensions have always been considered as a way of attracting people to the profession and indeed the TDA continues to list it as a benefit

Teaching benefits

In addition to your basic salary, you will also receive a range of benefits, including:

teaching and learning responsibility (TLR) payments – additional money if you take on additional responsibilities
teachers' pension – the second largest public sector pension scheme in the country
holidays – more days than many people in other professions, though teachers work for 195 days per year in school, and do some work during their holidays

a compensation for slightly (significantly) lower salaries applicants may attract in the private sector

teachers are asking for evidence of the necessity of the measures proposed not refusing change

Feenie Wed 31-Aug-11 11:05:35

I have no idea whether or not the valuation has been resumed.

It hasn't. And why? It's required by law - why don't the government want to demonstrate the actual costs of our pensions? The 2006 agreement made provision for teachers to pay more for their pensions, or for other changes to be made if the valuation requires it. This shows the willingness of teachers to accept their share of any increasing costs – but the Government wants to abandon that agreement and impose changes without any informed basis from a valuation

I am not fully familiar with the details of this dispute but if part of the proposed increase in employee contributions is to allow a reduction in employer's contributions
AFAIK, a reduction in employer's contributions isn't on the cards.

the employee's contributions themselves will continue to go into the TPS and will only be used for funding pensions.

Is that true? I was under the impression that there was no 'pot'.

mrz Wed 31-Aug-11 11:09:01

There isn't a pot our contributions today pay for pensions of those already retired

prh47bridge Wed 31-Aug-11 13:01:08

That is correct. The contributions go into the TPS to fund current pensions.

The actuarial valuation is not really about finding out what the scheme is worth. That information is published annually. It is about determining the correct contribution levels going forward.

The actual cost of your pensions is easy to find. In the year to March 2010 the TPS had £4.8 billion income funding outgoings of £15.3 billion of which £5 billion was pension payments, the bulk of the remainder being interest of £10 billion on the scheme's liabilities. Overall the scheme had an actuarial loss of £47 billion due to changes in the assumptions made in working out the scheme's liabilities. The balance sheet shows that the scheme is currently underfunded to the tune of £224 billion.

admission Wed 31-Aug-11 18:58:41

£224B! Oh so thats not a problem then, we can easily just ignore that small black hole!
I think that it is unrealistic of the teaching unions if they do not accept that something has to happen to close that small black hole, but at the same time the government does not seem to be all that keen to be open and honest (transparent is the current buzz word) about what the actuarial valuation currently is. Maybe it is time that everybody started to act like adults over this. It is a very serious issue for everybody concerned and lets at least get to some level of compromise that moves things forward rather than what looks like another serious of strikes which will be pointless and just cause more harm than good.
There is also the small matter of the corresponding set of pensions run by LAs for non-teaching staff which are also significantly underfunded if the info from Academies converting is to be believed (the black-hole transfers to the Academy as a long-term deficit)

mrz Wed 31-Aug-11 19:40:48

admissions they have accepted something has to be done they just want the facts and figures

mrz Wed 31-Aug-11 19:45:03

The Public Accounts Committee report in May 2011 showed that pension costs will reduce by £67 billion over next 50 years. The National Audit Office report in December 2010 suggested public sector pensions are "sustainable and affordable".

Mum2be79 Wed 31-Aug-11 21:09:49

I'm a teacher and I haven't got a clue what's going on with pensions! I'm with NASUWT which I do know have more patience with the talks than other unions. One reason why I picked them. I hate it when people go rushing into things like strikes - it doesn't do our reputation any good.

prh47bridge Wed 31-Aug-11 23:27:56

The PAC report did not show that at all. It stated that government projections (i.e. the NAO report referred to) show that the 2007/08 changes will reduce costs by £67B over 50 years. That includes civil service and NHS pensions as well as teachers. However, the PAC noted that, as stated in the NAO report, 60% of this saving was expected to come from a change which has not been implemented (cost sharing and capping, which would result in higher employee contributions and/or lower benefits). Therefore if we carry on as we are the saving will less than £27B over 50 years. Note that all these figures are about the saving compared to what would have happened if none of the 2007/08 changes had been implemented. They do not suggest that public sector pension costs will fall. Indeed, the projections used show that pension costs will increase in absolute terms, although the cost to the taxpayer may stabilise as a percentage of GDP provided the Treasury's growth estimate is correct.

The NAO report into the impact of the 2007/08 changes did not describe public sector pensions as sustainable and affordable. It specifically avoided commenting on affordability on the basis that this is a political judgement. On the question of sustainability, it looks at three areas:

- financial stability
- fitness for purpose in recruitment and retention
- setting the right example to the private sector

On financial stability the NAO report pointed out that the only mechanism within the 2007/08 changes designed to improve stability was cost sharing and capping. As already noted, this has not been introduced. The NAO report goes on to point out that many possible sources of financial instability are not addressed by the 2007/08 changes at all.

The NAO did not arrive at a clear conclusion on fitness for purpose but noted that the changes substantially reduced the value of public service pensions to staff in the new schemes.

Finally, on setting an example to the public sector the NAO concluded that the 2007/08 changes had failed.

mrz Thu 01-Sep-11 08:16:07

www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/833/83302.htm

2007/08 changes

IthinkIamUndecided Thu 01-Sep-11 09:17:55

Thank you for your replies. One more question:

"I am not fully familiar with the details of this dispute but if part of the proposed increase in employee contributions is to allow a reduction in employer's contributions
AFAIK, a reduction in employer's contributions isn't on the cards".

Does this mean that the government are going to carry on making a 14% contribution to teachers' pensions?

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