Mrs Gillan said: 'We have been losing too many experienced, high quality school teachers through premature retirement in recent years. The reforms announced today should reduce premature retirements in schools, will allow schools to retain more of their experienced teachers, and in turn it will reduce the demands on the teacher training system.
'The employers' contribution rate to the Teachers' Pension Scheme will be reduced. That will release funds so that employers can pay directly for those premature retirements that they believe to be necessary.
'In addition we intend to double the death grant paid from the Teachers' Pension Scheme from one year to two, from 1 April 1998, thus bringing it into line with the other major public sector schemes give employers greater flexibility to make severance payments to younger teachers: the current limit of 30 weeks' pay will be more than doubled to 66 weeks Close two loopholes in the ill health arrangements which will ensure that teachers in receipt of an ill health retirement pension will no longer be allowed to work as teachers and that those teachers who have been barred for misconduct will be ineligible for an ill health retirement pension
The package of proposals issued for consultation today includes three sets of regulations and a copy of the Government Actuary's Report on the TSS. The consultation period closes on 17 January 1997.
The government actuary's report recommends that the employers' contribution rate to the TSS should be reduced from 8.05 per cent to 7.2 per cent. Teachers' contributions will remain unchanged at 6 per cent. The way in which the employers' contribution rate is calculated is to be changed to take account of the costs of index-linking. At the same time, the investment assumptions underlying the calculations will be changed to reflect the rates of return found in real pension funds.