9th January 2012

Government threatens to impose pensions settlement

"These heads of agreement deliver the Government's key objectives in full, and do so with no new money since our November offer. In future, pension ages will match the state pension age, future schemes will be on a career average basis, and all the agreements are within the cost ceiling I set in November, and will save the taxpayer tens of billions over the decades to come."
Danny Alexander (Treasury Minister - 20/12/11)

At the start of the Christmas holidays the government set the public sector unions an ultimatum to agree that we should work longer and pay more to get less. They threatened not to talk to unions that didn't sign up.

The NUT, NASUWT, UCU and UCAC (Welsh teachers' union) didn't agree to this and are consulting on where next to take the campaign.

The ATL, NAHT and ASCL agreed to sign up to these principles.

Across the rest of the public sector there is a mix of opinion, which will become clearer over the next fortnight.

The terms the government wanted the NUT to agree to were as follows:
• contributions to rise from 6.4% of salary to an average of 9.8%
• retirement rising to State Retirement Age. 68 for anyone under 34.
• the pension to rise by CPI rather than RPI. This cuts 15% from the average pension.
• accrual at 1/57th of pay per year of service but based on career average rather than final salary.
• Further for the career average calculation, pay is only upgraded by CPI+1.6%, which devalues contributions over time.
• If you retire early then your pension is cut by 3% each year for the first three years and then 5% a year for extra years.
• those aged 50 or more on 1st April 2012, will stay in the current scheme and have full protection. Those aged between 46.5 and 50, will stay in their current scheme longer.

The important thing to note is that the major threats to our pensions - against which we took strike action - are still there.

Crucially, the government have offered no more money, they have just moved it about a bit.

They have improved the accrual rate from 1/60ths to 1/57ths and they changed the actuarial reduction to 3% for the first three years, but the way they calculate the career average is much worse and pays for these changes.

It is surprising that the leadership of some unions have given in to the government's blackmail, after the November 30th strike exceeded expectations.

The NUT executive will be meeting on 12th January to decide on our next course of action.

Our case remains the same:
• teachers can't work to 68,
• our pensions shouldn't be taxed to pay for the deficit,
• our scheme is affordable and already on track to make substantial savings as a result of the changes made just five years ago.

This article courtesy of NUT East London Teachers' Association

Pensions negotiations updates can be found at www.teachers.org.uk/pensions


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