Teachers Pension Scheme.....changes

[wynne71]

Thought I would post on here as I am sure there will be plenty of mis-leading and unfair/biased press in the coming weeks.

Our blessed Government has decided to change the long standing and fully self sufficient TPS. Without a full audit, basing their decisions on the deficit rather than the actual funding of the scheme.
It has been claimed that the TPS is subsidised by public, ie tax payers, money. This is untrue. The scheme is funded via the monthly contributions paid in by all the staff in the scheme. A recent (2010) KPMG audit proved this beyond doubt. However, the Government continue to pedal the idea that this is being heavily supported and needs to be amended. Yet they refuse to announce figures to prove this fact, stating that it will take 2 years to do a full feasibility survey.

So, how will this affect me? well, I have just done a calculation based on the amount of time I have paid into the system, how old I am, my current salary and a projected end salary.
As of April 2012 (and for the following 2 financial years) my contributions will increase to an additional 50% of the current.
Over the period of a projected 25 year retirement I will be (taking into account the change of interest rate calculations, the time paid in and the change in final salary) over £400K worse off. Not a few quid, not a small dent in my pension, over £400K.

The trouble is, I am a headteacher, and a HT at the bottom of my schools pay range. So over the coming 5 or so years, should I meet my targets (because performance related may IS here) I will be worse off each pay rise. For the following 3 years, any pay rise will be wiped out by the pension increase. This will take my pension contribution in 2015 to over £600.

Now, I earn a decent salary, but I am also being taxed at the 40% bracket, am paying added VAT, fuel duty, diesel increases as well as a huge increase in everyday food expenses. But, over the period of the next 3 years, I will (due to a pay freeze and the added pensions contributions) be taking a 15% pay cut.

Why am I paying over and over for the mistakes of a few greedy, thoughtless bankers???

And how am I to convince the HTs and school leaders of tomorrow that this is a good career path?? Impossible. It is hard enough as it is with schools being bashed and shamed at every turn of the press and government policy.

I work hard, do regular 70+ hour weeks, have a huge impact on the lives of hundreds of disadvantaged children (700 in my school alone) and am being punished financially for this.


Thanks for reading. I just hope a few of you will read this and begin to understand the frustration of myself and millions of public sector workers, especially with the lies and counter lies that are being thrown around in the press and government releases.
I know there are tough times ahead for all of us, but lets make this proportional and fair.

End of rant. For now.

[barryrs]

Couple of points really.

1. Paying into your pension isnt a pay cut its saving for the future.

2. £400k over 25 years is £16k a year; just what were you expecting?

and finally.

3. You generate no new money for the economy therefore your opinion doesn’t count

[wynne71]

Oh good, nice to see the sensible non-biased forum user is awake.

1. Paying into a pension would be a saving, however, the contributions have risen, for a longer period of time to receive MUCH less. Therefore it is a cut.

2. Again, paying more, for longer (due to an increased retirement age) is not expected, nor fair. I was expecting the figures that were promised in the TPS CONTRACT that I signed up to in 1993, ie: 50% of my final salary as a pension, plus lump sum. This was changed in 2007 to a sliding scale of lump sum value v pension.

3. Of course we don't generate money. But, if we get it right, we provide the country with young people fit for the work place. If we get it wrong, the claimants for dole increase. Never mind life chances etc..

So you never gained anything from school?

[barryrs]

Originally Posted by wynne71

1. Paying into a pension would be a saving, however, the contributions have risen, for a longer period of time to receive MUCH less. Therefore it is a cut.

Apologies if im mistaken but is the final value of the pension scheme not linked to market performance; and are you suggesting that everyone else should stump up the difference if the market under performs?

Lets not forget the 15% that the government has been putting in which has trebled over that last 50 years or so.

Originally Posted by wynne71

2. Again, paying more, for longer (due to an increased retirement age) is not expected, nor fair. I was expecting the figures that were promised in the TPS CONTRACT that I signed up to in 1993, ie: 50% of my final salary as a pension, plus lump sum. This was changed in 2007 to a sliding scale of lump sum value v pension.

You must except that due to increased life spans that something has to change; you are paying more for longer due to increased retirement age because you will on average live 10 years longer. That says to me that you need to save more or retire early and live off a reduced amount?

Originally Posted by wynne71

3. Of course we don't generate money. But, if we get it right, we provide the country with young people fit for the work place. If we get it wrong, the claimants for dole increase. Never mind life chances etc..

So you never gained anything from school?

My response was tongue in cheek hence the

Im not trying to have a pop (nor was I in my other thread) rather trying to be convinced that public sector employees aren’t delusional in there pension aspirations.

[WILSON_JTS]

I shall not be replying to the above, it'll cause arguments. Had many of those with my sister who is a teacher.

[73GTVJim]

It is a difficult and emotive subject and you may not want to hear dissenting voices from the great unwashed members of the private sector.

Unfortunately, the public sector is entirely self-interested with regards to pensions and inexplicably expects everyone else to be sympathetic when they get, by and large, seriously inferior pensions themselves.

Originally Posted by wynne71

I was expecting the figures that were promised in the TPS CONTRACT that I signed up to in 1993, ie: 50% of my final salary as a pension, plus lump sum.

I wish I got the 50% based on 30/60ths that was in place when I joined my employer in 1992 but it was changed in the late 90's to 40/80ths then closed as a DB scheme about 4 years ago so we all now have to be in a DC scheme which is far less certain in terms of payout in the end.

I didn't want to subsidise the mistakes of bankers and politicians either and I'd prefer to pay less tax towards gold plated pensions for the public sector to be completely honest.

Real world. Welcome.




PS - it is "peddle" not "pedal" the idea - courtesy of a good, and appreciated, education

[wynne71]

Real World?

Never mind, knew I wouldn't get a reasonable hearing. Green eyed and all that.

Its about fairness. Signing up for a pension contribution scheme was/is part of the renumeration for my job. I earn 55% of the salary of an equivalent CEO of a private company managing the budget and staff on a like for like basis. I effectively manage a public purse of £3M+ a year, 100 members of staff and 700+ pupils. As part of this role I expected to be treated fairly.

I know and accept that I will be working for longer, thats not the issue for me. It is the fact that the value of my pension (that I have paid 85% of) is being devalued. Thats all.

Those of you in private schemes, good luck to you. Those not in pension schemes at all, again, good luck.

We make our choices as we start a career and as we progress along the work life we lead. My choice was to pay into this scheme. It has now changed beyond reason, I'm not happy, neither are millions of public sector workers.

[barryrs]

Originally Posted by wynne71

I know and accept that I will be working for longer, thats not the issue for me. It is the fact that the value of my pension (that I have paid 85% of) is being devalued. Thats all.

I’m surprised to hear that you have paid 85% of your pension value when 14.1% is currently contributed by your employer.

The TPS quotes this as an example.

Average Salary: £40,716.09
Deemed Date for Future Increases: 12.04.2011 day after date to which salary rates revalued.

Calculation of Benefits will therefore be:

18.000 (pensionable years service) x 40,716.09 (uplifted average salary) divide by 80 =

£9,161.12 (Annual Pension) and £27,483.36 (lump sum) payable from 01.09.2011.



To achieve that in the private sector i would need to pay something in the region of £650 per month or 20% of my monthly income.

Edit.

My bad, my maths was based on what is paid in total by the state employee & employer. If I wanted the same pension provision of 25 years but in just 18 years of service I would be looking at £1065 per month or 31%

[wynne71]

Originally Posted by barryrs

To achieve that in the private sector i would need to pay something in the region of £650 per month or 20% of my monthly income.

And there in lies the issue, at the age of 22 I chose to pay into a public sector scheme, after speaking to a FA. The line of work I was about to begin gave me the option to buy in or opt out.
I could have chosen a career/job that didn't have a public sector pension, as many of you did, but I didn't. So the pension (and any other end benefits) were part of the decision in the career/job.
This has now changed and in my eyes unfairly.

You could have been a public sector employee, but chose not to, for one reason or another. In my shoes you would be as equally chuffed off. But you are not, so please don't compare apples with satsumas.

[barryrs]

My issue is that the example I quoted comes in at around £230K over 25 years of claiming a pension yet the total paid by the employee (£47k) and employer (£104) is £151k a shortfall of £79k.

If retirement only lasted 15/16 years that figure would balance out; so I assume its our responsibility to pick up the tab for that additional £79k then as you have the luxury of living another 10 years?

[1of1]

FFS, I'd be glad just to get paid regularly...


I echo the above 'real world' comment

[mudhut]

Well I'm not surprised at the various reactions to the OP, whose viewpoint I entirely support of course.

[steveisfrowning]

Originally Posted by 73GTVJim

Unfortunately, the public sector is entirely self-interested with regards to pensions and inexplicably expects everyone else to be sympathetic when they get, by and large, seriously inferior pensions themselves.

Not true, James. Not entirely.......and I expect disrespect, hate, flaming, bile, innuendo (if I'm lucky) and venom.

[1of1]

Come on, this is now the second thread on AO about this...propably more to come TBH

The last set of strikes pretty much provoked the same responses...

I have literally battled through the last few years, but survived (just) - I am a realist that has made sacrifices & just hope that better times are to come

Anyhoo, it's the rant room, a place not for debate, but a place to 'get it off your chest' as far as the OP is concerned - I shall bow out & go looking for foodstuffs in local hedgerows for me tea

[steveisfrowning]

Look out for those brown 'hedge pebbles', they are particularly delicious.

[FredDibnah]

Originally Posted by wynne71

Why am I paying over and over for the mistakes of a few greedy, thoughtless bankers???
.

Whilst I have no love for the bankers - I think that the structural hole in the Public Service Pension Scheme model was identified well before 2007/8.

This is an issue of an ageing population and an inexorable rise in the expectations of what is affordable and possible given that there isn't much similarity between the post war 1945-1980s world and the one that we live in today.

Gold plated pension schemes were only ever possible when you had 6, 7 or 8 working men for every 1 pensioner being supported. The current model - and what is coming - is more like 2 working men for every pensioner.

50 years ago, the vast majority of people were working from 16-65 and living til 70-75. Quite enough money going in from one end and not too much coming out at the other - in fact just enough to offer 5-10 years of wandering around the bungalows of Torquay before shuffling off the old mortal coil. When I was working at British Aerospace in the early 1980s there were regular "pensions holiday" periods where no money from either the company or the employee was taken for part of the year as it just wasn't required.

What have we had since the 1990s? Everyone going to University until they were 21 (or 22/23 if a gap year was included) and trying to retire between 55-60 so that they can get a good 20-30 years in of caribbean cruises, golf and apartments in Spain. That's totally unsustainable (I blame Judith Chalmers personally!)

The financial crisis since 2007 has had some impact certainly, but it's not the basic issue. In fact it's being used by some politicians to hide the very fact that this has been a structural weakening issue for years and the "bankers" are a good way of forcing through a necessary but unpopular change.

[1of1]

Originally Posted by steveisfrowning

Look out for those brown 'hedge pebbles', they are particularly delicious.

Attached to hedgehogs?

[RONHULLOCK]

Originally Posted by wynne71

And there in lies the issue, at the age of 22 I chose to pay into a public sector scheme, after speaking to a FA. The line of work I was about to begin gave me the option to buy in or opt out.
I could have chosen a career/job that didn't have a public sector pension, as many of you did, but I didn't. So the pension (and any other end benefits) were part of the decision in the career/job.
This has now changed and in my eyes unfairly.

You could have been a public sector employee, but chose not to, for one reason or another. In my shoes you would be as equally chuffed off. But you are not, so please don't compare apples with satsumas.

Yep,you are absolutely right,you took the job(An extremely difficult,but extremely important job)on the terms and conditions offered at the time,it is completely unfair to make any public sector worker pay for the greed of the private sector(banks)back in the eighties and early nineties when pulic sector pay was forced down and down by the tories and private sector workers were getting better and better pay,no one gave a flying ****** about the unfairness of that situation,now when the boots on the other foot people are all up in arms.This has ****** all to do with the state of the economy and all to do with the tories hatred of the public sector.fair enough to offer new terms and conditions to new staff,but to impose changes on existing staff should not be allowed,doing this by stirring up public distrust by dubious means reminds me of the various sleazy tory campaigns of the past(single parents and anti union propoganda are two i can remember)don,t fall for their misleading propoganda when they have not put all the facts forward,as disraeli said there are three kinds of lies"lies,damn lies and statistics"

[CobolMan]

Originally Posted by RONHULLOCK

Yep,you are absolutely right,you took the job(An extremely difficult,but extremely important job)on the terms and conditions offered at the time,it is completely unfair to make any public sector worker pay for the greed of the private sector(banks)back in the eighties and early nineties when pulic sector pay was forced down and down by the tories and private sector workers were getting better and better pay,no one gave a flying ****** about the unfairness of that situation,now when the boots on the other foot people are all up in arms.This has ****** all to do with the state of the economy and all to do with the tories hatred of the public sector.fair enough to offer new terms and conditions to new staff,but to impose changes on existing staff should not be allowed,doing this by stirring up public distrust by dubious means reminds me of the various sleazy tory campaigns of the past(single parents and anti union propoganda are two i can remember)don,t fall for their misleading propoganda when they have not put all the facts forward,as disraeli said there are three kinds of lies"lies,damn lies and statistics"

Do you really honestly believe that? I left teaching in the '90s to go into the private sector (yes I work for an 'evil' bank) and I took a 20% pay cut in doing so and there was NO pension for the first year. I'm now probably earning the same as a teacher on the top of the scale yet my current employer's pension will be nothing like what I would have got had I stayed in the classroom. The sad fact is that many (not all) public sector pensions are now unaffordable to the country. You cannot simply blame the 'bankers' (as per the Labour Party's propaganda, it neatly gives them a scapegoat to excuse their financial incompetence since 1997), the issue is far more complex than that.

[EddieGTA]

Originally Posted by FredDibnah

Whilst I have no love for the bankers - I think that the structural hole in the Public Service Pension Scheme model was identified well before 2007/8.

This is an issue of an ageing population and an inexorable rise in the expectations of what is affordable and possible given that there isn't much similarity between the post war 1945-1980s world and the one that we live in today.

Gold plated pension schemes were only ever possible when you had 6, 7 or 8 working men for every 1 pensioner being supported. The current model - and what is coming - is more like 2 working men for every pensioner.

50 years ago, the vast majority of people were working from 16-65 and living til 70-75. Quite enough money going in from one end and not too much coming out at the other - in fact just enough to offer 5-10 years of wandering around the bungalows of Torquay before shuffling off the old mortal coil. When I was working at British Aerospace in the early 1980s there were regular "pensions holiday" periods where no money from either the company or the employee was taken for part of the year as it just wasn't required.

What have we had since the 1990s? Everyone going to University until they were 21 (or 22/23 if a gap year was included) and trying to retire between 55-60 so that they can get a good 20-30 years in of caribbean cruises, golf and apartments in Spain. That's totally unsustainable (I blame Judith Chalmers personally!)

The financial crisis since 2007 has had some impact certainly, but it's not the basic issue. In fact it's being used by some politicians to hide the very fact that this has been a structural weakening issue for years and the "bankers" are a good way of forcing through a necessary but unpopular change.

Most sensible post here, its about time it was realised these kind of gold plated pensions are simply unworkable regardless of who is in power or what the banks are doing.

No sympathy here, I earn well (though nowhere near 55% of a CEO salary!) I nearly went into our company pension but have not, I just don't see me being here in 5 years or maybe sooner. Either the company will go to the wall, I will go mad and leave or be made redundant in some way. And there's no guarantee like your pretty pensions.

Oh and I just found we still have a pay freeze this year. So do I care about your pension, nope not really.

[steveisfrowning]

It's all simplistic and rather unpleasant at times, all of this.

[wynne71]

I was just having a rant, getting it off my chest on the appropriate section of the forum.
Didn't expect the majority to agree with me, by any stretch of the imagination. But, I did expect a minority to jump at the bait and state the usual, so not too disapointed all in all!





Had my rant, will retire to my pampered public sector job and count the cash I don't have.
Its only OUR kids we are trying to educate, nothing important like making/losing money.
Cheers and good night.

PS: so what should I look out for in my hedge for supper.....

[steveisfrowning]

winalot weetabix

plentiful and nourishing

if whiffy

[EddieGTA]

Originally Posted by steveisfrowning

winalot weetabix

plentiful and nourishing

if whiffy

Just be quick, the foxes might beat you to it!

[CobolMan]

Originally Posted by wynne71

Had my rant, will retire to my pampered public sector job and count the cash I don't have.
Its only OUR kids we are trying to educate, nothing important like making/losing money.
Cheers and good night.

PS: so what should I look out for in my hedge for supper.....

Good luck with trying to educate the youth of today, you have my admiration and sympathy (having been there and done that in the past).

You may want to have a look at The original road kill cookbook [Book] - I don't recommend badger though