Pension Update 2013

Colleagues,

I have reported previously that agreement had been reached with Scottish Government on the issue of sidebar discussions around workforce planning and early retirement schemes (focussed on the 20,000 members who are currently NPA 60 but will become conscripts to the new scheme from April 2015).

A meeting has just been confirmed this week for that forum to be convened. The EIS has reservations about the current composition of the group but will participate, nonetheless.

Pre summer a video conference was held with HM Treasury, on 21 June 2013, which allowed us to press them on the actuarial assumptions they were imposing on the Scottish discussions.

This was a frustrating experience as it became clear that the Treasury, in line with UK Government policy, was largely impervious to persuasion with regard to a Scottish model, which had been developed and discussed over the past year’s discussions, to allow teachers to retire at 65 with an actuarial reduction of 1% for each year from 66-68.

UK Treasury has effectively vetoed the Scottish negotiations around this "soft landing”. It has done so by applying assumptions which neither the Teachers’ Side nor the Scottish Government accept, but which would have had the effect of changing the current accrual rate to 1/61.2. This is a detriment we can’t accept.

Some additional matters came to light which we are continuing to query. For example, it emerged, contrary to previously held opinion, that members caught between the current NPA 60 scheme and the new NPA 66-68 scheme (which comes into effect from April 1st 2105), may retire at 60, draw their first pension pot (i.e. all pensionable service to 31 March 2015) but defer their second pot, NPA 66-68, until they reach state pension age.

These will be index-linked. This opens up a whole new chapter around behaviour assumptions which we are exploring, along with colleagues in the NUT.

It would not be possible for a teacher to remain in post and draw down her/his NPA 60 pension, but it seems it would be possible to retire, take the NPA 60 pension, and then return to teaching and continue to accrue service in the post April 2015 scheme or defer lifting the post April 2015 pension until that age is reached.

This may have a significant impact on the number of NPA 60 teachers who are forced to stay in post until 66-68, which has knock on effects for the assumptions currently being made to block the early retirement factor of 1% per annum referred to above.

These are areas of on-going discussion.

However, at the last meeting of the Scottish Teachers’ Pension Scheme Negotiating Group, held on 14 August 2013, it was agreed that further meetings of the negotiating group, without a change of mind from UK Treasury, would be redundant and that the issues to be pursued would need to happen at a political level.  

It was agreed, also, that the Teachers Side, would continue to be involved in scheme specific design to protect the interests of members.

The view of the Executive Committee is that we are effectively still in negotiation with Scottish Government to seek to secure early retirement options for those who currently have an NPA of 60 but who will be forced to work until a retirement date determined by the state pension age; progress in this sidebar discussion, however, needs to be evident, quickly.

Larry Flanagan
General Secretary