In June, and again in November, the ATL stepped forward and took action on pensions – raising their standing across the trade union movement. So it’s a real disappointment to see them now put out a statement justifying their acceptance of the Government’s ‘Heads of Agreement’ which, in my opinion, deliberately misleads its members about what the ‘deal’ really means for teachers.
The ATL presentation http://www.atl.org.uk/pensions/pensions-consultation/new-tps-statement.asp fails to explain that the ‘Heads of Agreement’ made absolutely clear that the overall 'cost-ceiling' was not going to increase - so that there was no more money on offer. Therefore, in order to get the better accrual rate of 1/57, proclaimed as a victory by the ATL, something else had to be cut - and that's exactly what happened.
Career-averages have to be linked to some kind of indexation to bring past salaries in line with today’s prices - and that's where the ATL signed-up to a worsening of the scheme.
In November, the Government were proposing the link was with average earnings. Now they have cut that to CPI + 1.6%. In other words, the slightly improved accrual rate of 1/57 (i.e a bigger amount set aside each year to improve pension payouts) was paid for by a worse indexation rate (reducing the indexation of past earnings so cutting pension payouts).
The ATL statement deceptively states that the benefits of the ‘deal’ include “An accrual rate of 1/57ths, rather than the current 1/80ths for who joined the TPS before 2007 and 1/60ths for those who joined after 2007”. But their pensions experts must know that you can't simply compare accrual rates in a final-salary scheme to a career-average CARE scheme.
Because of the way that career-average schemes work, CARE schemes will mean a much smaller pension unless the new ‘accrual rate’ is considerably better than the 1/60 rate that applies in the existing final-salary scheme for new entrants (for example, the Nuvos career-average scheme negotiated in 2006 for the civil service has a much better rate of 1/43).
The 1/57 accrual rate on a career-average scheme with this rate of indexation means nearly all teachers will get LESS PENSION. We will also all PAY MORE and, for most teachers, RETIRE OLDER too. So how can the ATL present this as acceptable?
Regrettably, their case studies showing the ‘benefits’ of the scheme they have signed-up to illustrate the pensions that a teacher would get at 65. This is mimicking the distortions that the Government came out with in November. As we explained then, of course working on past 60 improves the payout of even a poorer pensions scheme – because you’ve had to put five more years of contributions into it!
Most teachers will be forced to retire long before they reach their State Pension Age – particularly if Gove gets away with piling even greater pressures on teachers through his latest threats of fast-track sackings and longer working days. That will be at the cost of a hefty cut to their pension through an actuarial reduction. No doubt the Treasury has already worked out how much more it will save as a result.
The NUT Pensions calculator http://www.teachers.org.uk/node/12872 shows the real losses under the ‘Heads of Agreement’ Scheme. For me, it’s a £33 pay cut in April, rising to a £108 monthly pay cut in April 2014. Even with some transitional protection, I’d lose £400 a year in pension if I retire at 60 and £87,000 in total from my pension over my retirement. For young teachers, it will be a lot, lot worse.
The NUT is honestly presenting the facts to its members. Yes, we know that our action won some concessions - with the Government conceding in early November that the oldest teachers would still be able to retire at their existing pension age. But, this is nowhere near enough.
The ATL agreed it was an inadequate concession when they took action with us on November 30. In fact, as Osborne then announced that he was accelerating the raising of the State Pension Age to 67 and 68, things have got worse, not better.
So the ATL should stop trying to spin the figures and admit that they have signed-up to a deal that means teachers will PAY MORE, GET LESS, and RETIRE OLDER.
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