THE FUTURE cost of teacher pensions is sustainable and the Government must not “walk away” from its responsibilities, the largest teachers’ union said last night.
Government plans to change public service pensions will see teachers pay more into their pensions than they will receive in benefits, the Irish National Teachers’ Organisation (INTO) claimed.
The union said this was unfair, unnecessary and “probably illegal”.
Research commissioned by the three teacher unions – the INTO, the Association of Secondary Teachers Ireland and the Teachers’ Union of Ireland – concludes that the new scheme will mean the Government is no longer making a “meaningful” contribution towards staff pensions. The new pension scheme is being introduced for all public service workers, including teachers, from 2011.
An independent report by Trident Consulting published by the teacher unions says changes to pensions introduced in 1994 and 2004 along with the pension levy imposed last year have reduced the Government contribution to teachers’ pensions to 3.4 per cent.
The report points out that from an employer’s point of view, many of the risks associated with final salary schemes relate to large pensions following high salary growth at the end of a career. It says this does not apply to teachers because there is no rapid salary progression, salary scales are compact and there are very few big earners.
The report concludes that the “combination of these factors means that the existing pension terms for teachers, taking into account the 1995 and 2004 changes among others, are sustainable”.
Under current regulations, a pension scheme without a meaningful employer contribution cannot be approved by the Revenue Commissioners (section 772 of Taxes Consolidation Act 1997 and Revenue “pensions manual” chapter 4) and therefore may not be registered by the Pensions Board. The INTO said the State must meet the terms for recognition of pension schemes which it applies to other schemes. “The State should be a good employer, provide adequate pensions for retirement and share the cost of these.”
The report shows that because membership of the pension scheme is compulsory for teachers, new teachers will be forced to join a scheme from which they would expect to receive no net benefit.
The Government is effectively planning to walk away from paying any employer contribution towards pensions for teachers, unions claimed.
The value of teachers’ pensions has already been reduced significantly in 1995 and 2004.