ATL

Pensions

ATL strongly believes that, within the education profession, leaders, teachers and support staff are entitled to good quality pensions in their retirement, often having devoted their entire professional lives in the service of educating future generations.

The Teachers' Pension Scheme (TPS) and the Local Government Pension Scheme (LGPS) aid in the recruitment of new staff and act to retain experienced staff. ATL remains convinced that the current pension arrangements for leaders, teachers and support staff are affordable and sustainable for the long term.

Scheme design

ATL firmly believes that the TPS and LGPS should be final salary schemes.

• As far as possible, the main aim of any pension provision should be to maintain the standard of living an individual has achieved at the end of their working life into and throughout their retirement.

• Final salary schemes reward devotion to long service and act as an incentive to joining the profession and to saving for retirement.

• Final salary pensions are easy to understand and offer certainty to scheme members. They simplify an area of financial planning that can cause confusion. They have existed for many decades and are therefore trusted by employees. They make final pensions relatively easy to estimate, enabling employees to plan effectively for their retirement.

• Lord Hutton's proposal to end final salary schemes and implement career average schemes will significantly reduce the benefits of leaders, teachers and support staff in retirement and will impact the low paid hardest, typically women and part-time employees.

• The government must prevent unnecessary changes to pensions. Both the TPS and LGPS have very recently been reformed to make them more affordable. Pensions are long term assets and constant changes risk degrading their perceived value to members and future members of the scheme. This is especially relevant to the low paid, who are more likely to opt-out of the schemes as a result of uncertainty.

Public sector pensions are not a means for raising revenue by the government

ATL believes that regular actuarial valuations of the TPS and the LGPS funds are the correct means by which the financial health of the schemes should be assessed. Proper frameworks and mechanisms should be maintained to share fairly any additional cost pressures between members, employers and the government.

• Pensions are a key part of our members' remuneration package and therefore contributions must be affordable.

• Excessive contribution rates will discourage members from remaining in the pension scheme and, in particular, may deter new members from joining.

• The government has arbitrarily decided to increase contribution rates despite the consequences for scheme participation, which will have an impact on scheme sustainability far into the future. This decision is not evidence-based, but a political desire to raise revenue. We do not accept that there is a case for increasing member contributions in either scheme.

• There is no current justification for an immediate and arbitrary increase in member contributions and the government should withdraw plans to increase contributions.

• The government should give the cap and share arrangements time to work.

• The requirement to protect the lower paid will mean that the middle and higher paid will end up paying significantly more than the proposed three percent, making participation in the schemes unaffordable for many. This is particularly relevant in the LGPS, which has a significant number of low earners.

• Pension provision is a long term and continuing cycle and ATL urges the government to take a similar view. The government should not use public sector pensions to raise revenue in times of economic hardship, disregarding the long term objectives of that provision. The regular actuarial valuations are the correct means by which the financial health of a pension scheme should be assessed.

The pressure on members to opt out of these schemes or to not join in the first place will be immense. Increased student debts, buying a home and the costs of raising a family are bound to mean that large numbers will feel they have no other choice but to opt-out of pension saving.

• Bearing in mind the huge impact on the long term viability of the scheme if members opt-out en masse, the government must carry out a detailed analysis of the impact this would have on scheme membership before a decision is made on the level of contribution rates in the TPS and LGPS. 

• In calculating the appropriate contribution rate, the government must encourage the highest possible levels of membership to the TPS and LGPS.

Pension indexation

In order that our members do not suffer hardship in retirement, pensions in payment must be increased annually in order to keep up with inflation. The decision to change pension indexation from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) will have a profound impact on the value of our members' pensions in retirement.

• ATL agrees with the Royal Statistical Society that CPI is not an appropriate measure of price inflation and should not be used to increase pensions.

• We urge the government to accept the findings of the Royal Statistical Society and return to increasing pensions by RPI until further research and examination has been carried out on the appropriate index for measuring pensioner inflation.

• The government should provide clearer evidence, based on sound statistical rationale for switching indexation to CPI.

Retirement age

ATL members should be able to live with dignity and enjoy a period of time in retirement while they have the health and capacity to do so. Retirement age in the TPS and LGPS must reflect the capacity of the employee to do the job as effectively and efficiently as possible in order to meet the demands of the profession.

• Normal retirement ages in the TPS and LGPS should be maintained as they are at present.

• The government must acknowledge and recognise the growing difficulty of continuing to work full-time in education beyond the age of 60, particularly with younger, special needs or challenging pupils. Working in education requires not just mental capacity but is also physically challenging.

• Although average life expectancy is increasing, evidence clearly shows that this has not been matched by the length of time people live free of illness, disability or both. The evidence from the Department of Work and Pensions demonstrates that although people live longer, a large proportion of that increase in longevity is spent living with an illness or disability.

• The government should look at retirement planning and introduce guidance advocating that employers establish greater flexibility in working practices, hours, and the redeployment of staff. Employers must be able to offer the right adjustments in order to encourage working later in life and prevent increases in ill-health cases in the education profession.

Independent sector

ATL believes that all individuals working as teachers, or who have an element of teaching as part of their job description, should be allowed to join the TPS.

• The government must ensure that all those working in education are eligible to join the TPS or LGPS.

• Nearly 90% of independent schools in England and Wales are members of the TPS. This demonstrates the importance placed by employers in having good pension provision for their employees.

• A recent survey of ATL members clearly demonstrated that there exists a great deal of mobility between the maintained and private sector, which the government should continue to encourage.

• The ability to retain membership of the TPS between sectors clearly aids the mobility of staff in the education sector. This should continue and not be rescinded.

ATL calls for the current pension arrangements in the TPS and LGPS to be protected and maintained. ATL recommends the following:

• ATL members receive a pension that affords them independent living with dignity in retirement.

• The government acknowledges that the TPS and LGPS in their current form are viable and sustainable in the long term.

• The government maintains the one area of pension saving that is working in the UK.

• The government, as the largest employer in the country, continues to set the benchmark for pension provision in the private sector.

• Employers support decent pension provision, which will enable the recruitment and retention of high calibre motivated public sector employees.