According to the Hutton report, a female life expectancy at 60 is 32 years. Median teacher pay is £35k (same report). Based on a 2/3 pension (forty years working), this is £22k.
With partner benefit and RPI increases, this would require around £500,000 of pension savings.
At 10% contribution, assuming salary remained at £35k throughout, you have invested £140,000. With growth at 5%, this is around £400,000, so a little low.
Therefore a career average scheme with 10% contribution appears reasonable.
However, in the past this was 6.4% (Hutton report), which takes your pot to £270k, and was final salary, so even lower as less contributions in the early years.
The teachers scheme is unfunded, so, like NI, current contributions are used to pay current pensioners.:
It's true and we've never said otherwise, that at the moment more money is being paid out than paid in and the Treasury in that narrow sense is subsidising the scheme. We've also looked at the scheme across it's lifetime and accounted all the money paid in and out. £46bn paid more has been into the treasury than has been paid out. Long term it's £46bn in credit. In current years it's in deficit and next year it will probably be in more deficit because pensions will have gone up by CPI but because there's a pay freeze the contributions won't go up. So it will look more like it's in deficit. That makes the point that you can't look at them on a short term basis. You have to look at them in the long-term. Long-term the NAO and Hutton both say the schemes will become more affordable.
I think all the unfunded schemes taken together have a global deficit of around £4bn a year – clearly a lot of money but it has to be looked at long-term. The amount in tax relief contributions for the 1% richest in the country – people earning £150,000 and up - on their pension contributions per annum was £10bn. That puts it in context.