Act Now to Protect Your Pension Autumn 2010
The threat to our pensions • John Hutton’s report sets out various options for change – all will cut our pensions • George Osborne: ‘the public sector pension bill is unsustainable’ • Nick Clegg: ‘unreformed gold-plated pension pots … just not fair, not affordable’ • The Government has decided to impose higher contributions even before Hutton’s final report – this is the start of the attack on our pensions
Hutton proposals • Pay more • higher and/or tiered contributions? • Government now threatening a 3% rise • Work longer • pension age of 65 for all teachers? • maybe even higher in the longer term? • Get less • indexation change from RPI to CPI already proposed by Government • “career average” scheme?
The case against change (1) • Teachers’ pensions are fair! • The average teachers’ pension in payment is less than £10,000; only 5% are over £20,000 • Cuts will hit women teachers hardest • Teachers are saving for retirement – this should be commended not condemned
The case against change (2) • Teachers’ pensions are affordable! • TPS already reformed to reduce costs • normal pension age now 65 for new teachers • higher contribution rate of 6.4% for all • cost-sharing agreement limits employers’ contribution to 14% • Costs will fall as planned – cutting our pensions is a political choice not an economic necessity
Pay more… • Higher contributions? • to make short term savings • to make employer and employee contributions more equal • Effect of 3% extra • £40+ per month for NQ teachers • £70+ per month for UPS3 teachers • Tiered contributions as in local government?
Work longer… • NPA of 65 for all teachers? • pension accrued in future would only be available in full at age 65 • Effect of NPA of 65 • 50 year old on UPS3 who still retires at 60 would lose £1500 per year • Even higher NPA as State pension age rises to 68?
Get less… • Indexation - RPI to CPI • affects all members, planned for April 2011 • breach of election promise – and accrued rights? • Effect of RPI to CPI • a teacher retiring on a £20,000 pension will lose £70,000 over their retirement • “Career average” not “final salary”? • pension based on pay across whole career • “fairer” pensions?
The real pension problem • Two-thirds of private sector employees are not in any employer-backed pension scheme • 87% of private sector final salary pension schemes are closed to new members • Cutting public sector pensions won’t help private sector workers in retirement - we need decent pensions for all!
What you can do • Email your local MP • go to www.teachers.org.uk/notocuts - ask your MP to oppose pension cuts and RPI to CPI • email the link to 5 friends - ask them to use it • Support other NUT and TUC campaigning • Talk to colleagues and friends - your pension is fair, affordable and does not need to be cut!
Remember! • In 2005-6 the NUT and other unions saw off Government threats to slash our pensions • We succeeded by standing together and being prepared to take action • We may need to stand together once again to defend our pensions