Teachers (Superannuation) (Hansard, 15 June 1972)

§ 12. Mr. Jessel
asked the Secretary of State for Education and Science how the teachers' pension fund is invested.

§ Mrs. Thatcher
There is no invested fund. Interest is credited to the account at a rate fixed by reference to that obtainable from long-dated government stocks. The benefits and any post-retirement increases are paid from the Exchequer.

§ Mr. Jessel
May I ask my right hon. Friend whether the rate is not equivalent to only about 3½ per cent? Is not that a quite unnecessarily low yield which is not as advantageous to retired teachers as might be the case? Will she take another look at what is produced for the retired teachers?

§ Mrs. Thatcher
The rate of interest varies with the conditions. There have been times when it has been as low as 3½ per cent., times when it has been 5½ per cent., and times when it has been even higher. The terms of reference are such that the rate varies according to prevailing conditions. My hon. Friend will appreciate that there is a working party still sitting which has secured agreement on certain points and is to report shortly.

§ Mr. Bagier
Is it possible that the superannuation fund is not being invested correctly and that that is therefore partially responsible for the fact that the teacher contribution from salary towards it is higher than for many other sections of the public service?

§ Mrs. Thatcher
In part that is true. It is higher than for some other sections of public service—perhaps the hon. Gentleman has the local government sector particularly in mind. But the minimum retirement age of teachers is a good deal lower.

§ 25. Mr. Jeffrey Archer
asked the Secretary of State for Education and Science whether she has plans to improve the workings of the teachers' superannuation scheme.

§ Mr. van Straubenzee
Improvements have recently been agreed by the working party which has been reviewing all aspects of the teachers' superannuation scheme. Regulations will be laid before the House in due course.

§ Mr. Archer
I thank my hon. Friend for the reply. Will he assure the House that he will keep this matter under review at all times, as it influences the standard of our teachers?

§ Mr. van Straubenzee
Yes, Sir, in accordance with the required procedures. I think my hon. Friend will find, when he studies the scheme, that it contains some significant advances for the teaching profession.

§ Mr. Bagier
What approaches has the hon. Gentleman had from the teaching profession, who consider that there is dissimilarity between the Civil Service scheme which is non-contributory, the local government scheme in which the contribution is 6 per cent., and the proposed teachers' scheme in which the contribution is 6½ per cent.? Have any proposals been put to the teachers which provide for parity between teachers and others?

§ Mr. van Straubenzee
The basis of at least one scheme mentioned by the hon. Gentleman, as has been explained earlier, is very different from that of the teachers' scheme. I hope he will feel that the recommendations of the working party to be made to the Government will be a significant advance.