Teachers: Pensions

Education written question – answered at on 28 February 2011.

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Photo of Angela Eagle Angela Eagle Shadow Chief Secretary to the Treasury

To ask the Secretary of State for Education what assumptions he has made in respect of the dropout rate from the Teachers Pension Scheme attributable to (a) potential increases in contributions and (b) its indexation against the consumer prices index; what assessment he has made of the effects of the dropout rate on the future viability of this fund; and if he will make a statement.

Photo of Nick Gibb Nick Gibb Minister of State (Education)

At the spending review the Office for Budget Responsibility estimated that some additional members, amounting to 1% of the value of the paybill, would opt-out of all the public service schemes as a result of the proposed increase in pension contributions.

Further consideration of the effects of this policy on the opt-out rate will be made as part of the process of determining the distribution of increases in contributions across members of the Teachers' Pension Scheme. The Government are engaging with employee representatives on the principles to apply across public service schemes, and wishes to implement change in a way which minimises increases in opt-out rates. The Government are already committed to implementing contribution increases in a progressive way so that higher earners pay higher rates than lower earners.

No assessment has been made of the number of additional members that might opt-out as a result of the change in indexation.

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