CONSULTATION ON REFORMS TO THE TEACHERS’ PENSION SCHEME
17 August 2011 The Department for Education has launched a consultation on proposed changes to the contribution rate for employees in the Teachers’ Pension Scheme. The consultation document sets out proposals for increased employee contributions to the Teachers’ Pension Scheme in 2012/13 only. This represents around 40 per cent of the total contribution increases expected by 2014/15. Proposals for increasing rates in 2013/14 and 2014/15 and the wider Hutton agenda will be subject of further discussion with trade unions. The Government has already announced plans to secure £2.8 billion savings per year by 2014/15 by increasing public service employee pension contributions by an average of 3.2 percentage points (ppts) by 2014/15. The Government has already set out its intention to protect low earners with proposals that anyone earning less than £15,000 per year will see no increase, and those earning between £15,000 and £21,000 per year will see an increase of no more than 0.6 ppts in 2012-13, or 1.5 ppts by 2014/15. This will save around £300 million a year from the teachers’ scheme from 2012-13. The Department for Education is proposing to go further than this to reflect the structure of its workforce and is consulting on extending the £21,000 threshold to £26,000, meaning that 117,000 teachers in the early stage of their careers would pay an increase of no more than 0.6 ppts in 2012/13. Contributions increases would be greater for the highest paid, capped at 2.4 ppts in 2012/13 or 6 ppts by 2014/15. Follow this link to view the full range of proposed changes for 2012-13 7 September 2011 Proposals to implement a new LGPS with lower accrual rates could be used as a short-term fix to generate millions of pounds in savings required from the scheme by Treasury next year. The London Pensions Fund Authority have launched a green paper calling for a 1/70th accrual rate for the new career average local government pension scheme due in 2015. Read more from Professional Pensions 21 September 2011 A consultation has been published which seeks views on proposed changes to contribution rates made by firefighters towards their pensions. It sets out proposals for increased employee contributions to the two firefighter pension schemes for the financial year 2012-13. The consultation proposes that the lowest earning firefighters will see the lowest increases while higher earners, such as chief fire officers, would pay a higher contribution. Members of the New Firefighters Pension Scheme, which has more balanced contributions, will see lower contribution increases. The Government has already announced that the pension pots that firefighters have already accrued will be protected. This will not change. When firefighters take their pension built up in their final salary schemes it will be based on their final salary at the time of retirement, meanwhile firefighters will have the opportunity to build up their pensions under the reformed schemes for the remainder of their service. FIREFIGHTER PENSION REFORM CONSULTATION PUBLISHED LOWER LGPS ACCRUAL RATE COULD MAKE SHORT-TERM TREASURY SAVINGS
CIPP Policy News Journal
09/10/2012, Page 182 of 234
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