I am today launching the statutory consultation on a package of reforms to the Teachers' Pension Scheme (IPS).

The reform proposals reflect an agreement that has been reached following several months of negotiations with union and employer representatives. The key reform objectives of long-term affordability and sustainability have been achieved whilst ensuring that the TPS will continue to be an important and valuable element of the total remuneration package for teachers and lecturers. I am committed to the teaching profession continuing to be an attractive career choice with increasingly flexible career paths. Recruitment, retention and motivation will all be supported by a modernised TPS that will provide scheme members with greater choice and flexibility over the ways in which they can plan and save for their retirement.

Tough decisions have had to be taken to ensure that the teachers and lecturers of today—and those that will join the profession in future years—can continue to enjoy the benefits of a high-quality, defined benefit occupational pension scheme. I am, therefore, extremely grateful for the positive and constructive approach taken by all parties during the detailed and complex negotiations that have resulted in an agreement on a comprehensive package of reforms to the TPS.

The reform proposals will reduce by £5.4 billion the long-term costs of the TPS over the next 50 years. This is in line with the agreement reached in October 2005 between Government and the TUC on the framework for the reform of the pension schemes covering teaching, the Civil Service and the NHS. These savings will be delivered through the introduction of a pension age of 65 for new entrants from 1 January 2007; changes to the benefit structure for both existing members and new entrants; and an increase from 6 per cent. to 6.4 per cent. in the contribution rate paid by all members of the TPS.

To ensure the long-term affordability and financial sustainability of the TPS, agreement has also been reached with the unions and employers on a cost- sharing arrangement that will see members and employers meeting an equal share of any future cost pressures rather than them falling entirely on the employers as has been the position up until now. The agreement also provides for a ceiling of 14 per cent. on the employer contribution rate that will apply from the next valuation of the TPS in 2008. This agreement provides for much greater certainty and stability in employer costs that, to a significant extent, ultimately fall to the taxpayer.

I very much welcome this package of reforms. I am confident that it will be recognised by the membership as a very good outcome to the review of the TPS in which their long-term interests have been so well represented by their unions and employers. A copy of the consultation document will be placed in the library. It can also be accessed on the DFES website at www.dfes.gov.uk/consultations.