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VOLUNTARY EARLY RETIREMENT SCHEME - SCHOOL BASED TEACHERS
- PURPOSE OF REPORT
To review the existing early retirement arrangements for teachers in schools, and to suggest a revised scheme for the future.
- BACKGROUND
2.1The City Council operates a VER Scheme as part of the Employee Strategy, to assist with budget reductions when it is necessary to reduce the number of employees in the workforce. The LEA has traditionally offered a similar scheme to assist schools with budget difficulties, offering VER as an alternative to compulsory redundancy. The current scheme is available to teachers aged 50 and over, with five or more years qualifying and reckonable service under the Teachers Superannuation Scheme, and provides enhancement based on 1:7, i.e. one added year for each completed seven years of reckonable and qualifying service.
2.2Nationally, there has been closer scrutiny of VER Schemes and the Audit Commission in particular, have expressed concerns about the prohibitive costs of VER, and suggested that serious consideration should be given to other alternatives such as redeployment, retraining, and other options. There have also been increasing difficulties in recruiting and retaining sufficient numbers of teachers so it is necessary to consider restricting the number of teachers leaving the profession prematurely before age 60.
- EXISTING ARRANGEMENTS
3.1Teachers contribute to the TSS (Teachers Superannuation Scheme) which is administered by Teachers Pensions (TP). The scheme provides for payment of a pension and lump sum based on reckonable service. Since 1997, the costs of early retirement have been shared between TP and the LEA, whilst previously the full costs were met by TP. These costs are applied on a percentage basis, according to the age of the Teacher. However, it is the ongoing capitalised costs, met by the employer in full, which give the greatest cause for concern, as they can be very high and accrue for a number of years.
3.2The existing scheme also provides for 1:7 years enhancement, as well as meeting the mandatory/reckonable costs of early retirement. The scheme is available to teachers aged 50 years and over, although preference has been given to those aged 55 and over, as this is a more cost effective option.
- PROPOSALS
4.1It is proposed that the enhancement of 1:7 years of service currently available be removed, and that the LEA/City Council will in future, only pay the reckonable/mandatory costs of early retirement. It is further proposed that this option be available to teachers aged between 55 and up to 60 only, with appropriate qualifying service.
4.2The Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997 introduced a new provision, giving employers the power to make severance payments of up to 66 weeks salary. The current limit in respect of a week’s pay is £260.00, but the employer can disregard the earnings limit and pay compensation on a teachers full salary. This scheme is currently applied to teachers aged below 50 years and it is proposed that this scheme be applied to teachers aged below 55 years, and that the discretion to apply full salary be applied. (A copy of the “Ready Reckoner” is attached as Appendix 1).
4.3It should be noted that teachers are eligible to apply for ARB’s (Actuarially Reduced Retirement Benefits) at age 55 and over. ARB’s provide a reduced pension and lump sum, calculated on a percentage basis according to age.
It is anticipated that teachers in receipt of a severance payment under the age of 55 will make an individual decision as to whether to apply for ARB’s at age 55 and over, or wait to apply for full benefits at age 60.
4.4There will be discretion for a teacher aged above 55 years and below 60 years to be considered for an enhanced severance payment, instead of taking voluntary early retirement and accessing their pension.
- CRITERIA
5.1As far as possible, the LEA will continue to seek redeployment opportunities for those teachers at risk of redundancy either as a result of a budget deficit situation, a falling pupil roll, or the amalgamation/closure of a school. A redeployment and redundancy policy has been developed and school governing bodies are being asked to adopt the policy in the Spring Term 2004.
5.2Each application will be considered on its own merits, and approval will be subject to a decision of the City Council, following consultation with the appropriate Lead Members. Approval will not be given under this scheme for:-
(i)Ill Health
(ii)Professional misconduct or incompetence
5.3The City Council/LEA may at its discretion, authorise payments outside of this scheme, in exceptional circumstances, as determined by the Director of Education and Leisure, and in consultation with the appropriate Lead Members.
- EFFECTIVE DATE
The new scheme will be effective from 1st January, 2004.
- CONSULTATION WITH THE PROFESSIONAL ASSOCIATIONS
7.1The representatives of the recognised Teacher Associations have been consulted about the proposals. One of the representatives has commented that the removal of enhancement may result in fewer voluntary applications and more compulsory redundancy situations.
It was acknowledged however that few LEA’s regionally now offer an enhanced scheme for teachers.
A different representative has commented that the scheme is less favourable than the City Council Scheme, and also that Headteachers are discriminated against, as it is unusual for a Headteacher to be granted VER.
7.2The LEA response to these comments is that the removal of enhancement will not necessarily result in a fewer number of volunteers. Applications are only considered where a school is facing closure/amalgamation or has a serious budget deficit, and a teacher is potentially displaced. The LEA encourages schools to recruit teachers facing redeployment.
In respect of comments about the City Council Scheme, it is acknowledged that the schemes are very different. The Local Government Superannuation Scheme and the Teachers’ Pension Scheme are separate schemes and have different provisions. In terms of how voluntary early retirement operates within the City Council, the option to apply arises as a result of budget difficulties within the Council as a whole, and decisions are then made as to whether an application can be supported, and a specific post deleted.
The system within schools is very different, in that applications are only considered where (i) a school is facing closure/amalgamation and a teacher is therefore facing redundancy, or (ii) where a school has a serious deficit budget problem and the LEA supports the school by agreeing a VER or voluntary severance application.
It is very difficult for the LEA to control the staffing establishment of an individual school, although attempts are made to ensure that a school does not recruit to a post when a payment has recently been agreed for VER or voluntary severance.
7.3In respect of VER for Headteachers, it is unusual for a Headteacher to be supported as clearly all schools need a post of Headteacher, and there would be a huge cost to the LEA in supporting applications on criteria other than a school closure/amalgamation.
- CONCLUSION
The revised scheme will assist with the retention of Teachers up to normal retirement age, and will encourage the LEA, schools and governing bodies to make more considered, prudent decisions about retirement, taking full account of the costs involved and associated circumstances.
The scheme will continue to support applications where it is considered necessary to do so, but will reduce the perception that VER is available to those teachers who merely wish to retire early, and have an expectation that the LEA should agree to meet the costs.
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APPENDIX 1
DISCRETIONARY COMPENSATION, UNDER THE 1997 TEACHERS REGULATIONS
PART III FOR THOSE AGE 50 YEARS OR OVER
Completed Years of Service
1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / 13 / 14 / 15 / 16 / 17 / 18 / 19 / 205 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 47 / 49 / 51 / 53 / 55 / 57 / 59 / 61 / 63 / 65 / 66
5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 52 / 54 / 56 / 58 / 60 / 62 / 64 / 66 / 66
5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 57 / 59 / 61 / 63 / 65 / 66 / 66
5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 62 / 64 / 66 / 66
5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 65 / 66 / 66
5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 65 / 66 / 66
5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 65 / 66 /
MAXIMUM
/ 665 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 65 / 66 /
66 WEEKS’
/ 665 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 65 / 66 /
PAY
/ 665 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 45 / 50 / 55 / 60 / 65 / 66 /
APPLIES
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APPENDIX 2
DISCRETIONARY COMPENSATION UNDER THE 1997 TEACHER REGULATIONS
PART 111 FOR THOSE UNDER AGE 50 YEARS
Completed Years of ServiceAge
/ 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / 13 / 14 / 15 / 16 / 17 / 18 / 19 / 20 / 21 / 22 / 23 / 24 / 25 / 26 / 27 / 28 / 29 / 30 / 31 / 3220
21
22 / 2 / 4 / 6 / 8
23 / 2 / 4 / 6 / 8 / 10
24 / 2 / 4 / 6 / 8 / 10 / 12
25 / 2 / 4 / 6 / 8 / 10 / 12 / 14
26 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16
27 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18
28 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20
29 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22
30 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24
31 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26
32 / 2 / 4 / 6 / 8 / 10 / 21 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28
33 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30
34 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32
35 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34
36 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36
37 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36 / 38
38 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36 / 38 / 40
39 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36 / 38 / 40 / 42
40 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 23 / 34 / 36 / 38 / 40 / 42 / 44
41 / 2 / 4 / 6 / 8 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36 / 38 / 40 / 42 / 44 / 46
42 / 2 / 7 / 9 / 11 / 13 / 15 / 17 / 19 / 21 / 23 / 25 / 27 / 29 / 31 / 33 / 35 / 37 / 39 / 41 / 43 / 45 / 47 / 49 / 51
43 / 5 / 10 / 12 / 14 / 16 / 18 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36 / 38 / 40 / 42 / 44 / 46 / 48 / 50 / 52 / 54 / 56
44 / 5 / 10 / 15 / 17 / 19 / 21 / 23 / 25 / 27 / 29 / 31 / 33 / 35 / 37 / 39 / 41 / 43 / 45 / 47 / 49 / 51 / 53 / 55 / 57 / 59 / 61
45 / 5 / 10 / 15 / 20 / 22 / 24 / 26 / 28 / 30 / 32 / 34 / 36 / 38 / 40 / 42 / 44 / 46 / 48 / 50 / 52 / 54 / 56 / 58 / 60 / 62 / 64 / 66
46 / 5 / 10 / 15 / 20 / 25 / 27 / 29 / 31 / 33 / 35 / 37 / 39 / 41 / 43 / 45 / 47 / 49 / 51 / 53 / 55 / 57 / 59 / 61 / 63 / 65 / 66 / 66 / 66
47 / 5 / 10 / 15 / 20 / 25 / 30 / 32 / 34 / 36 / 38 / 40 / 42 / 44 / 46 / 48 / 50 / 52 / 54 / 56 / 58 / 60 / 62 / 64 / 66 / 66 / 66 / 66 / 66 / 66
48 / 5 / 10 / 15 / 20 / 25 / 30 / 35 / 37 / 39 / 41 / 43 / 45 / 47 / 49 / 51 / 53 / 55 / 57 / 59 / 61 / 63 / 65 / 66 / 66 / 66 / 66 / 66 / 66 / 66 / 66
49 / 5 / 10 / 15 / 20 / 25 / 30 / 35 / 40 / 42 / 44 / 46 / 48 / 50 / 52 / 54 / 56 / 58 / 60 / 62 / 64 / 66 / 66 / 66 / 66 / 66 / 66 / 66 / 66 / 66 / 66 / 66
Expressed in number of weeks pay
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