The increase will mean extra pressure on schools' budgets and will push up class sizes, according to local government employers.
Ministers are proposing to make LEAs bear the extra cost of early pensions for teachers from 1 April, instead of charging it directly to the pension fund. They hope this will limit the number of teachers leaving early and cut pension costs.
Employers pay£650 million in contributions every year. The government fears there could be a 7% increase in employer contributions over the next five years if early retirement continues at current levels.
Governors have been keen to let staff go early because it can help reduce costs. When a school has to make cuts, older staff, who tend to be on higher salaries, are allowed to retire and are replaced by younger, cheaper staff.
However, the government's response to the schools funding crisis has been to cut the intake of trainee teachers, according to Graham Lane, chair of the Local Authority Education Employers.
He said councils want the government's changes delayed until 1 September to fit in with the academic year.
They would be prepared to forego a reduction in employer contributions to pensions, proposed by the government from 1 April, at an estimated cost of£32m. This would be in exchange for new, cheaper pensions.
Employers are proposing improved redundancy payments, and an option for stressed senior teachers to step down to a lower post with no cut to their pension instead of retiring early.
They want teachers to be able to retire on a reduced pension to offset the cost. 'We are looking at bringing teachers into line with the rest of local government staff,' said Mr Lane.
'The government has got this pension thing in a gigantic mess and we're offering to solve it.'