Pensions Bill

Written evidence from NASUWT (PB 68)

 

The NASUWT is pleased to have the opportunity to submit evidence to the Pensions Bill Committee.

 

The NASUWT is the largest teachers’ union in the UK and represents serving and retired teachers in all phases of education.

 

The evidence draws upon the extensive experience the Union has of teachers’ pension provision and retirement expectations. 

 

GENERAL CONCERNS

 

1. The NASUWT has no principled objection to the simplification of state pension provision, provided the combined benefits of the state and occupational pension provide adequate and sustainable retirement pensions in the long term. The Union does have a track record of constructive engagement with the previous Government on the teachers’ pension reforms agreed in 2006, including measures to protect the taxpayer through a cap and-share arrangement for contributions.

2. However, it is only right to acknowledge at the outset that the NASUWT is opposed to the Coalition Government’s current programme of proposed reforms for public sector pensions, which the Union believes represents an unnecessary and unfair attack on public sector pensions in general and on teachers’ pensions in particular. The NASUWT has not signed up to the proposals outlined by the Department for Education’s (DfE’s) Proposed Final Agreement on changes to the Teachers’ Pension Scheme (TPS). In fact, unions representing over 90% of all teachers are opposed to the proposed changes to teachers’ pensions.

3. The NASUWT is opposed to aspects of the current Pensions Bill which it believes will further impact adversely on the teaching profession and, therefore, on education standards and education for future generations. Notwithstanding its rejection of the DfE’s Proposed Final Agreement on changes to the TPS, the Union objects to certain provisions in the Bill that fail to reflect even those inadequate proposals.

SPECIFIC CONCERNS

Clause 24 – Abolition of contracting out for salary-related schemes etc.

4. The provision in Clause 24 for the abolition of contracting out for salary- related pension schemes will result in a significant increase in National Insurance (NI) contributions for individual members of contracted out salary related occupational pension schemes, equal to 1.4% of the members’ relevant earnings at current NI rates.

5. This increase represents a further significant reduction in pay for teachers and other public service employees, on top of the incremental increases in pension contributions to the TPS already introduced by the Coalition Government between April 2012 and April 2014.

6. These pension contribution increases have been introduced in the form of earnings-related contributions and phased in over three years, with the first phase taking effect from April 2012. The increase in contributions to date have averaged 2.4% of salary and have ranged from 0.6% of salary for those earning less than £26,000 per annum to 4.8% for the highest- paid school leaders.

7. The third and final contribution increase for 2014-15 has yet to be determined but will bring the average increase over three years to 3.2% of salary and as much as 6% of salary for the highest paid. The precise level of contributions to be paid by each individual beyond 2015, when the reformed TPS is due to commence, has yet to be determined but will initially average 9.6% of salary.

8. By the time the third phase of increases is applied in April 2014, the total increase in member contributions will average 3.2% of the members’ total pensionable earnings – an average increase of 50% above the previous contribution rate of 6.4% of salary.

9. The NASUWT is appalled that after paying these higher contributions, further major reforms to public service pensions, including the proposed reform of the TPS from 2015, will result in teachers receiving benefits a third lower on average, as confirmed by the recent analysis of the public sector pension reforms by the Pensions Policy Institute. [1]

10. All these increases in pension contributions have taken place over a period of severe pay restraint for public service workers, during which teachers have been subject to a two-year pay freeze from September 2010, with the prospect of increases of only 1% per annum over the next three years. The only other increase in pay that teachers will have received during this time to offset price increases and the increase in contributions will be due to normal career progression, promotion or a change in job.

11. With effect from September this year, the draconian changes introduced by the Coalition Government to teachers’ statutory pay and conditions will have the potential to remove even these means of progression. The changes to the School Teachers’ Pay and Conditions Document mean that, where schools choose to adopt the Secretary of State’s preferred method of pay determination, any pay increase for individual teachers will be entirely at the discretion of the headteacher.

12. The NASUWT deeply regrets, therefore, that the proposals in the Bill entailing increases in NI contributions as a result of the abolition of contracting out will only compound the considerable real loss of income for teachers due to years of continuing price inflation, pay restraint and unjustified increases in their occupational pension contributions. The proposed increase in employee NI contributions should be withdrawn.

13. In a recent NASUWT survey of over 14,000 teachers, almost half (47.6%) said they already find it difficult to meet the increased cost of pension contributions and over three quarters (75.5%) said they could not currently afford to pay more for their pension. With the further contribution increases in April 2014, and the prospect of an increase in the NI contributions from April 2016, the Union is concerned that increasing numbers of teachers will ‘opt out’ of the TPS altogether, thus damaging their own retirement prospects and jeopardising the long-term sustainability of the occupational scheme itself.

14. The NASUWT is relieved to note the exclusion of public sector employers from the provisions in Clause 24 that would otherwise allow them to further increase members’ pension contributions or reduce their pension benefits to offset the increase in the employers’ NI contributions. The Union remains concerned, however, at the alternative measures employers may seek in order to offset these additional costs.

15. The increase in employers’ NI contributions is not being funded by the Government and will have to be borne from school budgets which have already been cut significantly in real terms during the lifetime of this Government. The NASUWT is profoundly concerned that the increase in employers’ contributions will be unaffordable to schools without the prospect of cuts to educational provision and job loss for teachers and support staff.

16. The NASUWT considers that the increase in employers’ NI contributions is simply not sustainable for schools. The increase should either be withdrawn or schools should be fully funded to meet the cost of it.

Clause 25 – Increase in pensionable age to 67

17. The Union rejects the need for increases in the state pension age (SPA) and objects to the provisions in Clause 25 to bring forward the increase in the SPA to 67 by eight years from 2034-36 to 2026-28. The acceleration of the increase in the SPA to 67 not only makes it difficult for individuals to organise their lives and careers or to make sensible financial plans for their retirement, but will directly impact on teachers’ occupational pension rights under the provisions of the Public Service Pensions Act 2013. The effect of the statutory automatic link of the teacher’s normal retirement age with the SPA will be to substantially raise the normal pension age (NPA) at which members of the TPS can take their teachers’ pension benefits in full, without actuarial reduction for ‘early’ payment, thus further reducing the value of teachers’ occupational pensions.

18. The provisions in the Public Service Pensions Act 2013, linking the NPA to the member’s SPA, has already provoked considerable anger and consternation among teachers, alongside other aspects of the proposed reforms to the TPS. Under the terms of the Public Service Pensions Act 2013, a teacher’s NPA is equal to their SPA.

19. In the matter of the equalisation of a teacher’s NPA and their SPA, teachers are treated far less favourably than members of the uniformed services pension schemes, who have an NPA of 60, irrespective of their SPA. The NASUWT considers that the Government should carry out an Equality Impact Assessment (EIA) into the differences in the normal pension age across the public service pension schemes. The only reasonable conclusion would be that all public service pension schemes should have an NPA of 60.

20. The NASUWT accepts that the DfE states that it has carried out an EIA. The NASUWT does not regard this assessment as fit for purpose. The data was lacking at the time and will continue to be lacking for the foreseeable future. Furthermore, the DfE EIA accepts that over 59% of teachers (those under 50 on 1 st April 2012) will see an increase in their NPA and over 14% of these teachers will see an increase in the NPA of eight years to 68. Despite this clear discrimination against younger teachers, the Government decided to proceed with the reforms to teachers’ pensions.

21. Teaching is a predominantly female profession, with 70.3% of TPS members being female, and the uniformed services are predominantly male professions. The NASUWT considers that the reforms to the public service pension schemes, including the TPS, have a very high likelihood of being discriminatory on grounds of sex as well as on grounds of age.

22. Teaching is an extremely demanding profession and teachers have planned their working lives, family and financial commitments so that they are consistent with the NPAs of the schemes of which they are members. Many teachers now face the prospect of having to work for far longer to receive an adequate and sufficient pension.

23. For this reason, the Government admits in its Proposed Final Agreement that, up until 2023, its assumption is that teachers will retire at the same ages they do now (Costing and Behavioural assumptions). The NASUWT believes that this will also tend to be the case after 2023, because of the highly demanding nature of teaching. In effect, therefore, most teachers will not draw a full pension under the reformed scheme, leading to potential teacher pensioner poverty for some teachers.

24. Teachers with protected accrued service in the scheme with an NPA of 60 are likely to take all of their pension at 60, including in the reformed scheme. Many teachers with an NPA which equals their SPA will lose around a third of reformed Teachers’ Pension Scheme benefits through actuarial reduction, to enable them to take their pension at 60.

25. For those teachers who wish to retire before their NPA of 60, both their accrued pension under the current scheme and their service in the reformed scheme, will be actuarially reduced, with a reduction for a teacher taking a pension at age 55 of at least a fifth of their accrued pension (NPA 60) and a reduction of at least half of their reformed scheme pension. The teachers’ pension reforms therefore give many teachers financial uncertainty after they have finished teaching, for the remainder of their lives.

26. In addition to this, the NASUWT finds it completely unacceptable that, if the pension age is raised above 68, all of the pension earned in the new scheme before the change will become payable at the new, higher pension age. Teachers will not be able to take the pension they have accrued at the pension age which pertained at the time of that accrual unless they accept an actuarial reduction in their pension benefits. Any Government can, in the future, worsen teachers’ pensions further to meet the cost of other Government expenditure. The NASUWT finds this scandalous.

27. In its design of the TPS the DfE has added ‘flexibilities’, which teachers can purchase to give an adequate pension. However, women teachers, disabled teachers, and black and minority ethnic (BME) teachers will be discriminated against, or at a serious disadvantage, as a result of the teachers’ pension changes and the Government’s pension flexibilities will not mitigate this. These teachers tend to be the lowest paid members of the profession and the flexibilities which the DfE has built into the TPS will be unaffordable. Furthermore, the age profile of women and BME teachers is younger than the generality of teachers and the Government’s pension reforms impact most detrimentally on younger teachers.

28. The NASUWT has analysed in detail the DfE’s EIA of the TPS reforms and makes the following specific comments about the equality impact of the reforms.

A pension scheme based on career average

29. The NASUWT notes with concern the DfE’s approach to the conduct of the EIA which is restricted to available TPS data (for age/gender) and school workforce census/General Teaching Council for Wales (GTCW) data (for ethnicity). The use of a ‘proportionate’ approach to the EIA suggests that the DfE takes the view that the impact on other protected groups is of marginal concern, despite having no data to substantiate that point of view. The NASUWT does not agree that the ‘proportionate’ approach adopted by the DfE is appropriate or proportionate. We are concerned that by not taking equal and proper account of the implications for the range of teachers with protected characteristics, the DfE risks pursuing a discriminatory approach to pension scheme reform.

30. The NASUWT is also concerned as to the adequacy of the data on which the DfE has based its analysis. For example, data in respect of ethnicity is sourced from non-TPS records. It is also clear that data in respect of ethnicity is constrained by the absence of data on all teachers (many teachers refuse to provide such data) and many data records reflect third party/management classifications made of a teacher’s ethnic group. The NASUWT has invited the DfE to confirm the extent of missing ethnicity records within the school workforce census/GTCW data sources and the extent of use of non-third party classified ethnicity data held by each of these sources. To date, this data has not been provided by the DfE.

31. Furthermore, it cannot be assumed that the profile of the workforce will match the profile of the membership of the TPS. It would be helpful to know what actions the DfE has taken to verify the relevance of workforce census and GTCW data for decisions on the future of the TPS.

32. The NASUWT notes that the DfE is undertaking work with the Teachers’ Pensions Agency to survey members of the scheme. However, despite repeated requests by the Union, the DfE has failed to provide details of how this work is being progressed. It is also clear that this work is continuing to fall short of expectations regarding equality impact since data on a range of members with protected characteristics continues to be missing.

33. The NASUWT is concerned that the three key tests have not been applied in the DfE’s analyses provided to date, namely: eliminating discrimination, harassment and victimisation; advancing equality of opportunity; and fostering good relations.

34. The NASUWT does not share the view put forward by the DfE that lowering the pension benefits payable to men (as a result of the move to CARE) will provide any positive impact for women per se.

35. The proposed pension changes will produce substantially inferior benefits for women as well as for men. As the cost of a pension increases for all teachers, it is likely that those who earn less (disproportionately women) will lose most as a result of being forced to opt out of the pension scheme. Indeed, the evidence submitted previously by the NASUWT to the DfE suggests that men will be less likely to opt out and are more likely to benefit from the protections and additional flexibilities within the proposed reformed scheme.

36. The same argumentation applies in respect of the DfE’s claims about the positive impact of CARE on older and younger teachers. The DfE’s assessment seems to assume a system in a steady state, where the CARE arrangements apply in full to all teachers. However, as the system is undergoing a major transition, it is essential that the DfE assesses the impact during this period of transition. For example, in the transition from final salary to CARE, the DfE needs to examine the extent to which teachers within ten years of retirement (e.g. those currently aged between 50-59 years) will lose out as a result of the proposed pension scheme changes and the extent of the loss to be experienced by other groups of teachers (e.g. those currently aged between 40-49 years, 30-39 years and 20-29 years), and then to assess whether and to what extent, these losses appear to be proportionate and justifiable.

37. The DfE needs to show how, and to what extent, the income gap in retirement for women and men and for older and younger teachers is expected to be affected as a result of the proposed pension scheme changes, and again to assess whether, and to what extent, any losses appear to be proportionate and justifiable.

38. The arguments made above in respect of the impact by gender apply also in relation to ethnicity impact. The NASUWT does not accept the view advanced by the DfE that, "teachers from minority ethnic backgrounds will benefit to a greater degree". The DfE would do well to recognise that minority ethnic group teachers are likely to be discriminated against when seeking access to promotion and are disproportionately represented on the lowest pay scales. The DfE needs to provide a like for like comparison of all classroom teachers, which would confirm that minority ethnic group teachers and white teachers are to suffer detriment as a consequence of the proposed pension scheme reforms. The DfE must also recognise that the reforms do nothing to advance equality for minority ethnic teachers whose pensions in retirement will be lower and who will have less opportunity to boost the value of their pensions as a result of lower pay levels whilst in service. Further, minority ethnic teachers are also less likely to benefit from any transitional protections in the proposed reformed scheme.

An accrual rate of 1/57 th of pensionable earnings each year

Revaluation of active members’ benefits in line with CPI +1.6%

39. In addition to the concerns cited above, the NASUWT challenges the DfE’s claim that the proposed accrual rate and revaluation factor ‘provide the fairest balance for the majority of the membership’. The NASUWT is disappointed that the DfE has failed to provide empirical data in support of this claim.

40. The NASUWT is concerned that the changes to accrual rates and revaluation must be seen in the context of actual earnings and the flexibilities available to teachers to secure a decent pension in retirement. With an extended pay freeze for teachers and proposals by the Secretary of State to increase pay flexibilities for headteachers, and also as the salaries of senior school leaders are continuing to increase year on year, it is clear that the proposed reforms will be profoundly unfair to the majority of TPS members.

41. The NASUWT has previously requested the DfE to set out the justification for limiting protection from the proposed scheme changes to teachers within ten years of their NPA and to provide data on the respective impact on the TPS changes on teachers with transitional protection (i.e. where the current accrual rate and revaluation factor applies) and for other non-protected age groups (i.e. where the new accrual rate and revaluation factor will apply).

NPA equal to SPA, which applies to active members and deferred members

Actuarially fair early/late retirement factors on a cost neutral basis except for those with an NPA above age 65 who will have early retirement factors of 3% per year for a maximum of 3 years in respect of the period from age 65 to their NPA

42. The DfE’s analysis indicates that around 30% of the TPS membership population will see no change to their NPA as a result of the proposed scheme protections. However, it is important that the DfE understands fully who will benefit from protection of their NPA.

43. Obviously, younger teachers and those in mid career will not benefit from this protection. But it is also evident from the DfE’s analysis that women are more likely to be adversely affected by this change by a margin of around 10%. Furthermore, the analysis suggests that white teachers are twice as likely to benefit from the proposed transitional protection compared to minority ethnic teachers where only around 16% are expected to benefit.

44. Thus, even on the basis of the limited equalities data the DfE has available to examine, the indicators are that a main element of the proposed TPS reform is discriminatory, and disproportionately so.

45. The DfE has not offered any meaningful mitigation in respect of the change to the NPA. To argue, as the DfE's impact assessment does, that the increase in the NPA will disadvantage men because men’s life expectancy is shorter than women’s, will provide no comfort or mitigation for teachers who are affected by these changes, and displays a deep contempt for teachers who have committed a lifetime to the service of children, young people and society at large.

46. The DfE’s analysis needs to set out the impact of the change to the actuarial reduction factors. Coupled with the flexibilities on offer within the proposed reformed scheme for teachers to buy more pension (a facility that is likely to appeal only to those on higher incomes), the claimed improvements offered by the changes to the actuarial reduction factors will be meaningless in practice for the majority of teachers. For those teachers who are unable to continue to teach due to limiting long-term illness or disability (often as a result of the debilitating physical and mental demands of the job), the increase to the NPA will erase any protection these teachers may otherwise have had as a result of changes to early retirement. The fact is, that under the proposed changes, these teachers will be significantly worse off through no fault of their own.

Pensions in payment to increase in line with Prices Index (currently CPI)

Benefits earned in deferment to increase in line with CPI

47. The NASUWT rejects the claim made by the DfE that CPI provision represents ‘no change’. Whilst the switch from RPI to CPI is now in place, it does nevertheless represent a major change to the TPS which, on average, will reduce pension in payment by around 15%. The NASUWT has opposed, and continues to oppose, this imposed change, which has been made without consultation and without any evidence of assessment of its impact on serving and retired teachers with protected characteristics.

Average member contributions of 9.6%, with some protection for the lowest paid

48. The NASUWT believes that given the failure to conclude the TPS EIA, it is wholly inappropriate for this or any aspect of the scheme reforms to be implemented on 1 April 2012. The NASUWT must insist that the implementation date for any and all provisions of the reformed scheme must be deferred until completion of the EIA process or, preferably, the date for implementation of the revised TPS – i.e. 2015.

49. The NASUWT notes the statement made by the DfE that the change to the policy on pension contributions was imposed unilaterally by the Treasury without consultation. The damaging impact of the change is compounded by the failure of the DfE to provide a current valuation of the scheme, and is therefore in breach of the current TPS arrangements and requirements.

50. The NASUWT does not accept that the EIA published by the DfE in respect of changes to employee contributions is satisfactory or robust, or that it satisfies the expectations arising from case law and existing good practice guidance. In particular, the DfE undertook no consultation on this critical change to the TPS and, as the current EIA exercise confirms, the DfE has acted without access to the relevant equalities data, thereby preventing a comprehensive assessment of the impact of this change across all protected characteristics, prior to the implementation of this change to the pension scheme.

51. The NASUWT has provided previously to the DfE detailed evidence on the potential impact of the change to employee pension contributions in terms of opt out levels, but we have received no response from the DfE.

52. The Union notes that despite the intention of the DfE to impose further (as yet undefined) increases to employee pension contributions as part of the proposed TPS reform package, the document provided to Stakeholders provides no assessment on actual or potential equality impacts of contribution increases in 2013/14 and 2014/15. The NASUWT is concerned that the DfE is about to once again move to determining further changes to contributions rates and structures without, as the law requires, taking into account in advance the potential equalities implications of any such changes. The NASUWT reiterates that it is simply not acceptable for the DfE to make policy changes in this manner and that the duty of ‘due regard’ requires that the equalities matters are considered at the outset and not after the event. The Union does not believe that it is appropriate for the DfE to confirm an average increase to pension contributions of 9.6% within the architecture of the reformed TPS, without having first undertaken a thorough assessment of the potential equality impact of that change.

Members who leave the scheme and return within 5 years will have their accrued service in the current NPA60/65 scheme linked to their final salary at retirement

53. The NASUWT notes the assertion by the DfE that it is right ‘to be fair to people who have built an expectation of a certain pension income’ and the acceptance that appropriate safeguards are needed for teachers ‘who have less opportunity to adjust to any change before they retire’. However, it is disturbing that the DfE adopts an arbitrary approach to delivering such protection in practice. Many teachers in their mid careers, for example, are unable to make adjustments and, having been members of the TPS for many years, will have built an expectation of their pension in retirement. For the majority of these teachers, these rights are to be denied. The NASUWT does not regard this as acceptable or proportionate.

54. The NASUWT once again questions the DfE’s analysis of teachers affected by breaks in service and the claim that ‘the impact of this provision is not likely to be disproportionate on either males or females’. It is unclear whether an appropriate baseline has been used for the DfE’s analysis here. The proportion of men and of women who take breaks in service as well as the proportion of men and of women who return within two or five years must both be considered in the analysis.

Transitional protection for those within 13.5 years of their NPA on 1 April 2012

55. The NASUWT believes that given the failure to conclude the TPS EIA, it is wholly inappropriate for this or any aspect of the scheme reforms to be implemented. The NASUWT must insist that the implementation date for any and all provisions of the reformed scheme must be deferred until completion of the EIA process or, preferably, the date for implementation of the revised TPS – i.e. 2015.

56. The NASUWT has made a number of observations on the issue of transition protection above and the fact that the DfE’s evidence confirms that the arrangements as they stand currently are discriminatory.

57. The NASUWT does not accept the argument advanced by the DfE that ‘it is necessary to draw a line somewhere or reform would not be possible at all’. The NASUWT must insist that drawing an arbitrary line is discriminatory and that any protection must pay due regard to the differential impact on teachers with different protected characteristics. The NASUWT is appalled that the DfE has provided no empirical data in this regard.

Members who leave the scheme and return within 5 years will have their benefits increased by CPI +1.6%; members who leave the scheme for longer than 5 years and return will have their benefits increased by CPI

58. The NASUWT notes that ‘the majority of those who leave the scheme and do not return (i.e. deferred members) are female’, but the Union is not clear from the DfE analysis that this reflects the profile of the teacher workforce. Thus, whilst the majority of teachers are female, is there any evidence that women are more likely than their male counterparts to leave the scheme?

59. The NASUWT notes with concern the claim by the DfE that ‘the number of deferred members clearly increases with age, which is perhaps evidence of teachers leaving the profession for other careers’. However, this statement appears to contradict the argumentation used by the DfE to justify protecting accrued rights of older teachers – namely, that ‘older people are closer to retirement and have less opportunity to adjust to any change before they retire’. Either way, the DfE appears to apply an inappropriate justification for less favourable treatment of younger teachers.

60. The NASUWT notes again the incomplete data available for the EIA; for example, the absence of data in respect of ethnicity and breaks in service.

Ill-health benefits

61. The NASUWT disputes the claim that there is no change in ill-health benefits, given that these benefits will be devalued as a result of the proposed changes to the TPS and, in particular, given the increased actuarial impact arising from the increase to the NPA. It is again unacceptable that the DfE has failed to provide any data on the impact of the proposed changes to the scheme on disabled teachers.

Flexibilities to purchase additional pension

62. The NASUWT notes that the DfE justifies flexibilities on the grounds that it will benefit older teachers (often those teachers on the highest salaries). This benefit is in addition to the 10 year protection, 3.5 years tapering and other changes which the DfE claims are ostensibly to support older teachers. However, there are no equivalent provisions which mitigate the impact of the proposed scheme changes on younger teachers who will be forced to pay more, work considerably longer and receive less.

63. The DfE claim that the flexibility to purchase additional pension ‘doesn’t impose differential equality of opportunity on men and women’ is simply false. The DfE’s own data confirms that it is men rather than women who are more likely to earn the highest salaries and it is likely that it is these teachers who are more likely to benefit from this additional flexibility.

ADDITIONAL COMMENTS –

ANALYSIS COVERING: DISABILITY; MARRIAGE/CIVIL PARTNERSHIP; SEXUAL ORIENTATION/GENDER REASSIGNMENT; PREGNANCY AND MATERNITY; RELIGION OR BELIEF

64. The NASUWT reiterates its concern that the DfE has failed to give ‘due regard’ to the impact of the proposed TPS reforms as required under section 149 of the Equality Act 2010. The NASUWT does not believe that the DfE’s proposal to delay the collection of missing data is a sufficient or appropriate response on a matter of such profound significance to teachers and for the future of the teaching profession. The NASUWT must insist that the DfE either secure a delay to the commencement of the legislative process to enable the proper completion of EIA process, or, preferably, it should abandon the proposed scheme reforms.

Disability

65. The NASUWT notes that the DfE has adopted a numbers-game approach to the EIA process. Whilst only 1% of teachers have positively identified themselves as disabled, the DfE must recognise that this is likely to reflect significant under-reporting of disability within the profession. Many teachers are unwilling to declare that they have a disability because of the perceived risk of being discriminated against at work.

66. The NASUWT notes that the DfE has no data on TPS members who are disabled and around half of the school workforce census records are incomplete.

67. The NASUWT is concerned that the DfE has failed to appreciate the impact of the association between disabled teachers and teachers working on a part-time basis. With around 30% of disabled teachers working part-time, the DfE must address how the proposed scheme changes will impact on part-time teachers and the potential for opt out from the pension scheme.

68. In the absence of data to the contrary, the NASUWT rejects the claim by the DfE that the scheme reforms do not discriminate or that the reforms will meet the duty to advance equality of opportunity for this group of teachers.

Marriage/Civil Partnership

69. The NASUWT notes that the DfE has no relevant data on this characteristic for TPS members or members of the school workforce in general.

70. In the absence of data to the contrary, the NASUWT rejects the claim by the DfE that the scheme reforms do not discriminate or that the reforms will meet the duty to advance equality of opportunity for this group of teachers.

Sexual orientation, gender reassignment (including transgender)

71. The NASUWT notes that the DfE has no relevant data on this characteristic for TPS members or members of the school workforce in general.

72. In the absence of data to the contrary, the NASUWT rejects the claim by the DfE that the scheme reforms do not discriminate or that the reforms will meet the duty to advance equality of opportunity for this group of teachers.

Pregnancy and maternity (and careers)

73. The NASUWT notes that the DfE has no relevant data on this characteristic for TPS members or members of the school workforce in general.

74. In the absence of data to the contrary, the NASUWT rejects the claim by the DfE that the scheme reforms do not discriminate or that the reforms will meet the duty to advance equality of opportunity for this group of teachers.

Religion or belief

75. The NASUWT notes that the DfE has no relevant data on this characteristic for TPS members or members of the school workforce in general.

76. In the absence of data to the contrary, the NASUWT rejects the claim by the DfE that the scheme reforms do not discriminate or that the reforms will meet the duty to advance equality of opportunity for this group of teachers.

Data Collection – Future Arrangements

77. The Union’s response above confirms that the proposed data collection arrangements are regarded as wholly unsatisfactory and that it is our view that the proposed process will not enable the DfE to satisfy its due regard duty under the Equality Act 2010.

78. The NASUWT is appalled by the disproportionate concern of the DfE for the burdens on employers with regard to data collection, when similar concerns do not appear to be evident in respect of employees who will be impacted substantially and adversely as a result of these profound changes to their pensions.

79. The DfE and employers have failed over many years to secure appropriate workforce data. Despite efforts to improve workforce data quality, it appears that since 2010 the problems have worsened as a result of deliberate decisions by Ministers and by the message emanating from the DfE on the need to cut ‘red tape’. The NASUWT believes that these decisions have directly impeded the completion of a satisfactory TPS EIA.

80. The NASUWT must remind the DfE that the due regard duty cannot be delegated to third parties. Therefore, the NASUWT does not regard the proposal by the Teachers’ Pensions Agency to be relevant to the DfE’s EIA and neither does it provide sufficient mitigation for the failure by the Department to conduct a thorough assessment of equalities impact of its proposed reforms. Furthermore, any such survey data is not assured and would not be available in any case until after the commencement of the Pensions Bill legislative process. It is shameful that the Public Service Pensions Act has been passed without a robust and comprehensive impact assessment having been completed.

81. It is understandable therefore that an indication of the low level of morale amongst teachers can be seen from the results of the recent NASUWT survey of over 14,000 teachers, which revealed that almost two thirds (64.5%) have seriously considered leaving their job in the last 12 months and over half (53.6%) have seriously considered leaving teaching.

82. The prospect of further increases to NPA, following so soon after the increase to age 65 under the reforms introduced in 2007, raises genuine concerns as to the reasonableness, practicality and sustainability of the provisions, given the high physical and mental demands associated with teaching, which is widely recognised, both nationally and internationally, as one of the most stressful of all occupations. [2]

Clause 26 – Periodic review of rules about pensionable age

83. The prospect of accelerated increases in pension age under the Bill’s provisions for periodic review of the SPA will only increase the levels of consternation and even despair amongst teachers faced with further increases in their NPA.

84. These concerns are compounded by the provision in Section 10(4) of the Public Service Pensions Act 2013 which requires that future changes to the NPA ‘must ... apply in relation to all the benefits (including benefits already accrued under the scheme)’.

85. The NASUWT believes the combination of the provisions for periodic review in the current Bill, coupled with the obligation to apply any increase to all post-2015 benefits, constitute a clear breach of the commitment given in the Coalition Government’s programme for government to protect accrued pension rights. It also contradicts the view of the Independent Public Service Pensions Commission (IPSPC) chaired by Lord Hutton that ‘protecting accrued rights is a prerequisite for reform both to build trust and confidence and to protect current workers from a sudden change in their pension benefits or pension age’.

86. The NASUWT has always had serious reservations about the Government’s 25 year guarantee of no further changes to public service pensions as set out in the Proposed Final Agreement on reform of teachers’ pensions. There is very little practical protection for scheme members in the 2013 Public Service Pensions Act to validate this guarantee. As a result, members of public service pension schemes have less protection than members of equivalent private sector schemes, where benefits can only be changed if the alternatives provided are actuarially equivalent.

87. The NASUWT believes that the Bill should be amended in order to better protect the accrued rights and entitlements of teachers and other public service workers. Specifically, the NASUWT believes it should include provisions to preclude future changes to the NPA being introduced in public sector pension schemes as a result of a periodic review of the SPA under the proposed Pensions Act, without agreement with the representatives of the scheme members likely to be affected.

88. As an absolute minimum, the NASUWT believes that any provision for a periodic review of the SPA must fully encompass the principle that ‘the link between the State Pension Age and Normal Pension Age should be regularly reviewed, to make sure it is still appropriate ’ (our emphasis) as recommended by the IPSPC and reiterated in the Proposed Final Agreement on the TPS.

89. To be absolutely clear, the NASUWT is opposed to any increase in the existing NPA and opposed to the link to the SPA in the Public Service Pensions Act 2013. The proposals in the current Bill to bring forward the increase to age 67 and for periodic reviews of the state pension can only have a detrimental impact on teachers’ incomes and retirement pensions, and could further weaken the confidence of teachers and other public service employees in the value of public service pension schemes.

July 2013