Was it really nine months ago that then schools minister Lord Agnew told teachers they were “ungrateful”?

He was reported as having said: “The state school teachers, they don’t recognise that they’re getting a 42 per cent increase in pensions contributions. They don’t say, ‘How wonderful - the state is really looking after us’.” 

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The profession quickly understood that the increased levy imposed on employers would have an impact on job security. 

It didn’t take a genius to work out that school budgets, squeezed during years of austerity, would be unable to meet the new demands. Class sizes would have to rise or teacher numbers would have to be cut to compensate for the shortfall.

Lose-lose situation

The government has protected state schools in the short term from the consequences of increased employer contributions by subsidising maintained schools and academies.

But independent schools have had no cushion at all. 

Some of these employers have never contributed to the scheme: teachers have to make their own arrangements. This year, many small schools have had to come out of the Teachers’ Pension Scheme (TPS) altogether.  

But the latest strategy has been the most contentious I have ever encountered. Teachers in one school have been offered the choice of either taking a pay cut and remaining in the TPS or accepting a one-off pay increase to use to set up their own pension arrangements.

In both cases, teachers stand to lose more than just these headline figures.

Taking a percentage pay cut means not only less take-home pay but also losing that percentage of pensionable pay from this year onwards. It’s a lose-lose situation.

Leaving the TPS inevitably means participating in a less advantageous scheme, with the additional worry about what will happen to your pension if the company goes bust.

A warning we should all heed

We all need to think very carefully about whom we trust with our hard-earned money.

The scandalous asset-stripping of the 1990s, when the unscrupulous bought and broke up businesses to sell them on, allowed these chancers to seize pension funds. The victims who lost their pensions were left with no support for their old age. It’s a warning we all should heed.

The fate of the Bus Employees’ Pensions, heard in Parliament in 1997, is certainly a salutary lesson. It’s a long and sobering read about the way in which £168 million was taken from the Bus Employees’ Superannuation Trust. 

Teachers trust the government to honour its commitments to pensions, not least because their pay is a political issue as well as a reward for their conscientious service.

Teachers are public servants and already portrayed as a cost to the system.

We know that when governments want to push “pay restraint”, our salaries will be the first to take a hit.

Furthermore, the loss of national pay scales has allowed academy chains and free schools to make their own pay arrangements (for which read: a less favourable salary, even including years in which national funding increases to schools have not been passed on to teachers).

Some teachers struggle just to make ends meet. 

Money paid into the TPS has come at a further cost to living standards. Pensions are deferred salary, money put aside for the future of the payee. 

All too often, the TPS is portrayed as a perk. It’s forgotten that teachers sacrifice sizeable payments every month to put into that pot.

Teachers currently paying into the scheme are supporting the retirees who paid into it during their working lives.

Without the contributions of teachers in both maintained and independent sectors, there will be still more pressure on the capacity of the pension fund to meet its obligations to retired and retiring teachers. And as salaries become less competitive, so the capacity of the fund becomes reduced.

Unpleasant truths about pay and pensions

When Lord Agnew portrayed the hike in employer contributions to the TPS as a philanthropic gesture, he failed to realise that inevitably teachers would pay the price in terms of their job security, their current pay or the security of the long-term provision for their retirement. 

It is an unpleasant truth that, whatever means the government takes to adjust the ways in which the pension fund is raised, it is always teachers who will foot the final bill: through loss of job security; through larger classes and workload, because schools cannot or will not afford to maintain 2010 levels of funding; through reduced benefits when the time comes to collect their pensions; or directly, through cuts to salaries within schools.

The unions and the profession as a whole cannot afford to ignore the repercussions of the sharp rise in employer contributions, and not just because of its effects on the independent sector. 

Nor can larger groups or trusts simply maintain a watching brief. Precedents are being set here, which could affect teachers in the maintained sector should the government decide it will no longer subsidise employer costs beyond 2021. 

And who knows what other “adjustments” will be made to everyone’s pay and pensions, before the 2020 generation of new teachers draw their pensions? 

Yvonne Williams is head of English and drama in a secondary school in the South of England. She has contributed chapters on workload and wellbeing to Mentoring English Teachers in the Secondary School, edited by Debbie Hickman (Routledge)