The UK government has set out its stall in relation to changes to pensions, making one change already (the move from RPI to CPI as the escalator for pensions in payment) and planning several more. The first of these is an increase in pension contributions, the second is a later retirement age and the third is a move to a career-average system of pension calculation. All these proposed changes flow from the Hutton review of public sector pensions. The UK Government will soon decide whether to implement some or all of them, in whole or in part. The Scottish Government will then have to decide whether it will choose to follow suit.
Teaching unions, among others, from south of the border have been understandably exercised about these issues. The NUT response was perhaps most predictable as a “traditional” union (indeed, I hear that the discussion at their conference which led to the agreement to ballot members on strike action was not a particularly heated affair, as they expect nothing less from the Conservative-led coalition). However, two more moderate unions in ATL (Association of Teachers and Lecturers) and NAHT (National Association of Head Teachers) were much more animated in their discussion of the Government’s plans. Neither of these unions has ever been on strike. Over the years, each gained considerable increases in membership during past strikes by other unions. This in itself demonstrates very clearly the strength of feeling and opposition to these proposals.
At the NAHT conference at the end of April, delegates were told that headteachers could face an increase in pension contributions of 53 per cent or more - they stated that such an increase equates to around pound;140 a month or pound;1,680 a year for an average headteacher. Add to that the plan to increase pension age to 66, 67 or even older and the proposal to introduce career-average pensions - which will have most impact on the pensions of promoted post holders. It’s little wonder they voted overwhelmingly in support of a ballot on industrial action up to and including strike action. Despite assurances from the Government that accrued benefits would be preserved, NAHT members were appalled by the proposals and the effect they would have on current and future generations of teachers and school leaders.
Three important points were made in the NAHT debate. The first was that in special schools, where both the physical and emotional demands on teachers can be considerable, and there can be more regular need to physically restrain pupils than in mainstream establishments, people begin to get “creaky” long before the current retirement age. It was considered unreasonable to expect staff to continue into their mid to late sixties in such roles.
The second was that there is already enough difficulty recruiting school leaders - shrinking pay-packets, increasing the length of careers and diminishing the value of pensions were not seen as a good way to help the situation. Delegates were reminded that the value of pensions in retirement had already been affected by the move from RPI to CPI as the pension escalator. It was noted that on a pension of only pound;10,000, this would result in approximately pound;49,000 less in pension payments over a 25- year period.
The third was that statistics show each year worked after the age of 60 has a considerable effect on longevity. This means that while pensionable age is increasing because of increased life expectancy, a consequence may actually be to reduce life expectancy. Further, while teachers would still be able to preserve their health and length of retirement by taking an actuarially reduced pension at 55, it would come with a hefty 42 per cent actuarial reduction.
Of course, we shouldn’t forget about changes agreed to the teachers’ pension scheme only a few years ago, which realised significant savings for employers and put a cap on their contributions. These were designed to ensure the scheme was affordable and sustainable.
It is against this backdrop that the UK Government is being encouraged to think again about its cost-saving measures for pensions. Michael Gove, Westminster’s Education Secretary, has tried to reassure the education sector that he will fight their corner in discussions with the Treasury and that he will listen and negotiate with unions. Neither ATL nor NAHT delegates seemed particularly reassured.
If these proposals go ahead in England, then there will be incredible pressure on Scottish politicians to follow suit. It would only be at that point that there would be a legitimate possibility of industrial action in Scotland (since there must be a trade dispute for industrial action to be lawful). If the UK Government goes ahead and the Scottish Government plans to take similar action, it would be very surprising if Scottish unions, including AHDS - which has never balloted its members on strike action, let alone walked out - did not take a similarly resolute stand against plans to increase teachers’ pension contributions and to make people work longer for smaller pensions.
How the UK Government reacts to the united front being presented by unions in England will be interesting to watch and will, to a large degree, dictate the probability of action here in Scotland. Hopefully it will listen to the united voice of our colleagues south of the border. They certainly have our support.
Greg Dempster is general secretary of the Association of Headteachers and Deputes in Scotland.
