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Schools minister Charles Clarke today announced a consultation on the ...
Schools minister Charles Clarke today announced a consultation on the

introduction of actuarially reduced pensions for teachers aged 55 and


Mr Clarke gave details of the move as the Teachers Pensions Working

Group, which included representatives of the teaching unions,

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

Actuary's Department.

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

for teachers;

* 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.'

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