introduction of actuarially reduced pensions for teachers aged 55 and
Mr Clarke gave details of the move as the Teachers Pensions Working
released its report which seeks to give flexible options to teachers
who wish to retire early or change their work pattern towards the end
of their career.
Actuarially reduced pensions would be combined with a package of
improvements, funded by employers, which will improve benefits for
some members, pensioners and their dependants, following ill health
retirement or death. These changes offer teachers a scheme in line
with the best occupational provision in the public service.
The improvements would include:
- benefits for ill health for teachers who retire, with between two
and five years qualifying service to be based on twice the
teacher's accrued service;
- a pension guarantee on death within five years after retirement of
a lump sum of five times the annual rate of pension, less the total
amount of pension already received;
- An in-service death grant to be paid if the teacher dies whilst on
unpaid maternity leave.
Mr Clarke said:
'I am grateful for the work of the group which has carried out a
thorough and fundamental review. I would like to thank members from
the teacher employer and union organisations who participated in the
review and produced an agreed report.
'I have been aware of concerns and misunderstandings about the fact
that the teachers' scheme is notionally funded. I am delighted
therefore with the conclusion of the group that a Notional Fund is
still appropriate as it provides the same investment return as the
average for large private sector schemes. Teachers will continue to
enjoy a fully inflation proofed pension.
'I will soon be consulting on proposals which reflect the
representations I have received from teachers and employers about the
limited options available to teachers who wish to retire early.'
1. The Long Term Working Group was established in November 1997 as a
result of a ministerial commitment to review pensions provision
for members of the teachers' scheme. Its members were drawn from
teacher and employer representatives, DfEE and the Government
2. The terms of reference for the group were: 'To examine the current
provisions of the Teachers' Pension Scheme and consider whether
changes are needed to meet the best interests of the education
service consistent with affordability to the public purse. In
particular to consider:
* whether it is still appropriate to have a single undifferentiated
scheme covering schools, further education and higher education;
* whether it is still appropriate to have a notionally funded scheme
* whether modifications of the current pattern of benefits for
teachers might better meet their needs and those of the service;
* whether individual teachers might be given greater flexibility to
make extra contributions for extra benefits;
* whether teachers should be allowed to take an actuarially reduced
pension at their own request;
* the development of a scheme which would make teaching more
attractive as a profession for new entrants.'