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The Government is trying to save money in the public sector; that's fine - indeed, that's a big part of what I voted for. However, I'm not in favor of unfair, symbolic, ideological cuts. Why are cuts to teacher's pensions unfair, ideological & symbolic? Simple: The Teachers Pension Scheme is not making a loss.
In 2006 the Teacher Pension Scheme was costing the public money and it shouldn't be funded by other taxpayers, of course. Teachers had their pension age extended to 65 and their contributions increased by £100 per month - afterwards, the Scheme paid its own way. The extra money being taken off teachers isn't going to the pension pot, it's going to the Treasury.
That's the crucial point.
Teachers are not the RMT, striking because two louts have been fired for putting public safety at risk. They are not Socialist Worker readers fulfilling their pathetic little plastic trumpet general strike fantasy (take note, Mark Serwotka).Teachers are citizens being asked for £150 extra pension contribution per month, in return for a 15% pension cut. If teachers were asked to take a direct pay cut at a time where inflation is running at 5%, then a strike over pay is definitely morally justifiable; that's what collective bargaining is all about.
Too many ministers and commentators act as if the Teacher's pension was a welfare benefit. In fact, in a free Market, public sector pensions are a financial product. As the fund is self sustaining, it is deeply unreasonable to expect that product to be torn up on the altar of political expediency. Allowing governments to feel pensions are "theirs" or even "taxpayers money" is a dangerous precedent and a nonsense.
The money is transferred directly from the teachers; it isn't "taxpayers money" in any but the most Stalinist hypothecated definition of the public finances.
To make teachers pay £1800 a year more for a pension which is £1800 a year less, when teachers are not actually costing the public finances anything to begin with... that's outrageous. If I was a teacher, I'd be out on strike. This is a straight, unfair tax hike, dressed up as pension reform and frankly the government should be ashamed to have proposed it. And I say all this as a card-carrying Conservative.
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What teachers are asking is that they retain their final salary arrangements, even though almost all in the private sector have given them up, with the increasing shortfall being paid by employees in the private sector through their taxes.
Final salary pensions require a sum of money available in a ‘pensions pot’ at the point of retirement of approximately £250,000 for a £10,000 pension to be paid.
That ‘pot’ is funded jointly by the employer and employee during their career.
The size of ‘pot’ has had to become much, much higher over the last thirty years as we are now living much longer (on average ten years longer than in the 70’s) and thus the pension has to be paid out for a much longer period. This effect is accelerating.
Because this increase in longevity was not fully forseen almost all schemes have too little money in them to meet their liabilities and it is getting worse.
In most of the economy, and almost universally in the private sector, these types of pension are now unaffordable and almost all employees in the private sector have had, grudgingly, to accept that any further pension they obtain will have to be through a defined contribution scheme where employer and employee put money in a ‘pot’ and invest it in the hope that it will be as big a pot as possible when they retire and will then fund a pension, the value of which cannot be foreseen today.
http://www.bbc.co.uk/news/uk-politics-13775278
The pension fund only seems to be properly funded because In 2003 teachers were paying a 6% contribution to their final salary, index linked pensions and their employer (i.e. the taxpayer) were paying 8.35%. By 2007, the ratio had changed so that teachers were funding their generous pensions with 6.4% of salary and the employer (i.e us) by 14.1% - equivalent to a 5.75% backdoor pay rise. The employer contribution will continue to have to rise as teachers live longer.
Then, perhaps, some MAY understand why some of us believe that short term politics is damaging the long term future of the nation.
But in any case, the contribution is tax deductable. Assuming 4% for an ordinary Inner City teacher they would actually pay more like £990 per year or £80 per month.
Also I'm confused as to how you are saying its self-sufficient. The contributions from the government are substantial. There is also a recorded shortfall, which has being growing steadily wider. That could not be the case if it was self-sufficient.
As to the reduction in benefits, that is far too generalised. Only those who's income rockets at the end of their career will lose out - the so called high flyers. The move from a final salary pension to a career average pension is designed to ensure pensions are not a lottery of those or get a surge at the end, but rather work hard through out their careers. Surely that is a good thing.
But the key point is this, how can you strike when negotiations are still ongoing.