HC Deb 13 January 1997 vol 288 cc62-5W
Mr. Don Foster

To ask the Secretary of State for Education and Employment if she will estimate the cost to the teachers' superannuation scheme if all current contributors and deferred pensioners chose to transfer their accrued pension rights from the teachers' scheme into a personal pension arrangement. [8561]

Mrs. Gillan

[holding answer 10 December 1996]: The cost to the teachers' superannuation scheme—TSS—if all current contributors and deferred pensioners as at 31 March 1997 chose to transfer their accrued pension rights into a personal pension arrangement is estimated at £14 billion. This estimate assumes that current contributors opt out of the TSS and so transfer their benefits only in respect of service after 5 April 1988.

Mr. Foster

To ask the Secretary of State for Education and Employment if she will estimate the cost to the teachers' superannuation scheme if all current contributors aged(a) 50 or over and (b) 55 or over years, as at 31 March 1997 chose to transfer their accrued pension rights from the teachers' scheme into a personal pension arrangement. [8562]

Mrs. Gillan

[holding answer 10 December 1996]: The costs to the teachers' superannuation scheme—TSS—if all contributors aged (a) 50 or over and (b) 55 or over as at 31 March 1997 chose to transfer their accrued pension rights into a personal pension arrangement are estimated as £3½ billion and £1½ billion respectively. These estimates assume that contributors opt out of the TSS and so transfer their benefits only in respect of service after 5 April 1988.

Mr. Barry Jones

To ask the Secretary of State for Education and Employment what estimate she has made of the reduction in the teacher work force consequent upon the proposed changes in the superannuation scheme; and if she will make a statement. [9981]

Mrs. Gillan

My right hon. Friend does not expect the proposed changes to lead to reductions in the teacher work force.

Mr. Jones

To ask the Secretary of State for Education and Employment what assessment she has made of the adequacy of current teachers' superannuation regulations to deal with teachers aged 55 years and over in the local education authorities of Wales. [9979]

Mrs. Gillan

Under the current regulations, the costs of premature retirement are pooled among all employers of teachers, and are brought to account some years after the event. This system does not encourage employers to behave prudently. Under the proposed new arrangements, since employers will have to pay the extra cost of each premature retirement as and when they make it, they will make more considered, prudent, decisions. These considerations apply to local authorities in Wales and to all other teachers' employers.

Mr. Jones

To ask the Secretary of State for Education and Employment what estimate she has made of the impact upon the morale of the teaching profession of her proposals to make changes in the superannuation scheme. [9980]

Mrs. Gillan

The Budget settlement allows for the cost to employers of a continuing programme of premature retirement. There is therefore no reason why teachers' morale should be affected by the proposals.

Mr. Jones

To ask the Secretary of State for Education and Employment if she will list the principal changes she proposes in the teachers' superannuation scheme; and if she will make a statement. [10220]

Mrs. Gillan

The principal changes proposed by my right hon. Friend are as follows: a reduction in the employers' contribution rate from 8.05 per cent. to 7.2 per cent.; making teachers' employers pay the extra cost of premature retirements as and when they make them; including the cost of pensions increase in the finances of the scheme; increasing the death grant from one to two years' salary from 1 April 1998; making teachers who have been barred for misconduct ineligible for ill health retirement benefits; and re-introducing the requirement that teachers should be permanently incapacitated in order to qualify for ill health retirement benefits.

Mr. Jones

To ask the Secretary of State for Education and Employment what representations she has received concerning her proposals to make changes in the teachers' superannuation regulations for teachers aged 55 years and over. [10142]

Mrs. Gillan

My right hon. Friend has received a large number of representations in respect of the proposed changes to the teachers' superannuation regulations.

Mr. Bill Michie

To ask the Secretary of State for Education and Employment if teachers who are members of the teachers' pension scheme currently have an entitlement to receive an unenhanced pension based on years of service up to the date of dismissal; if dismissed as redundant aged over 50 years; and what legal advice she has obtained on the lawfulness of changing that entitlement, as proposed on 22 October, by means of amending regulations. [10281]

Mrs. Gillan

Under the current regulations, a teacher over 50 receives an immediate pension only if their employer certifies to the Secretary of State that the teacher's employment has been terminated by reason of redundancy or in the efficient discharge of the employer's functions. Under the proposed regulations, teachers' employers would be allowed to make enhanced severance payments, up to 66 weeks' of salary, as an alternative to premature retirement, The Superannuation Act 1972 empowers the Secretary of State to make amending regulations after consultation.

Mr. Peter Bottomley

To ask the Secretary of State for Education and Employment if she will estimate the financial consequences of the proposed changes to funding early retirement for teachers in the maintained and in the independent sector. [10497]

Mrs. Gillan

The reductions in the employers' contribution rate from 8.05 per cent. to 7.2 per cent. will lead to estimated reductions of £87 million and £8 million in spending on superannuation contributions in maintained and independent schools respectively. The Budget settlement assumes that maintained schools will continue to make premature retirements at 75 per cent. of current levels in 1997–98. The estimated net extra cost in the first year of that level of premature retirement would be £15 million. If a similar rate of premature retirement takes place in independent schools the extra cost in the first year would be £1.8 million in 1997–98.

Mr. Bottomley

To ask the Secretary of State for Education and Employment how many applicants by teachers for early retirement have been (i) accepted, (ii) rejected and (iii) not determined in each of the past three years; and what she estimates the numbers might be if her draft proposals are enacted. [10495]

Mrs. Gillan

The Department collects data on the number of premature retirements granted by teachers' employers, but not on the number of applications made by teachers to their employers. Premature retirement is at the discretion of the employer.

Mr. Bottomley

To ask the Secretary of State for Education and Employment if the costs of early retirement for teachers is proposed to fall on the last school or on the education authority. [10498]

Mrs. Gillan

Under the current legislation, the cost of premature retirement for teachers in LEA-maintained schools falls on the LEA, unless it has good reason to charge the cost to the school's delegated budget. The Government have tabled an amendment to the Education Bill now before the House which would allow LEAs to charge the cost to a school's budget if the authority has not agreed to the premature retirement.

Mr. Bottomley

To ask the Secretary of State for Education and Employment if teachers and former teachers have accumulated customary rights to early retirement that will not be extinguished by the proposed changes to funding arrangements. [10496]

Mrs. Gillan

Teachers have no accumulated right to premature retirement, which is at the discretion of the employer.