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O’Dowd - Teachers earning up to £32,000 can be protected from pension hike

22 November, 2011 - by John O'Dowd

Lower earning teachers will be protected from upcoming increases in pension contributions under plans proposed by Education Minister John O’Dowd.

“The British Government has decided to increase pension contributions for public sector workers from April 2012. They intend to raise £2.8 billion by April 2015, which equates to an average increase in pension contributions of 3.2% of salary”

Mr O’Dowd said. “I am strongly opposed to their policy of increasing employee pension contributions to address the structural deficit. I do not believe that public sector pensions should be a means by which the British Government can increase its revenue especially at a time of a public sector pay freeze, increases in national insurance contributions, higher VAT and rising inflation.

“The British Government has made it clear that if the devolved administration does not implement the increase in pension contributions they will reduce the amount of money in the block grant by around £300 million over the next three years. Clearly this would result in a significant detrimental impact on the delivery of education and other front-line public services.

“The Executive has therefore committed to the principle of delivering the targeted level of savings to the cost of public sector pension schemes. However, the Executive resolved to engage with trades unions to discuss a graduated approach which would protect those at the lower end of the pay scale by seeking an enhanced contribution from those on higher salary within the public sector.

“In keeping with this approach, my Department is consulting on proposals which, if adopted, would guarantee that teachers at the lower to middle end of the pay scale would benefit from further protection over and above that announced by the British Government.

“I am also urging the teacher unions to consider variations on these options, including my Department’s proposal that there should be no increase in the contribution rate for teachers earning less than £32,000 a year, with the balance of savings being delivered through an enhanced contribution from those on higher pay bands.

“I am also prepared to consider any alternative proposals that the teacher unions or other stakeholders may bring forward.

“I remain keen to engage with the teacher unions and all other stakeholders on these proposals which I believe represent a potential way forward, given the parameters within which the Executive is required to operate.”

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