public sector pensions<\/a>, the Teachers\u2019 Pension Scheme (TPS) is often referred to as a gold-plated pension plan, because it offers a guaranteed income for life in retirement, unlike most private sector alternatives.<\/p>\nBut new polling commissioned by financial advice firm Wesleyan shows that many teachers don\u2019t value the pensions.<\/p>\n
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Polling of 500 teachers, conducted by OnePoll on behalf of Wesleyan, found that just 11 per cent of teachers think it offers very good value and a further 47 per cent say it offers good value.<\/p>\n
A quarter (25 per cent) say it offers neither good nor poor value, and 11 per cent believe it offers poor value.<\/p>\n
Nearly a quarter (23 per cent) of teachers say they would switch the current TPS scheme from a defined benefit (DB) scheme, which offers guaranteed payments, to a defined contribution (DC) scheme.<\/p>\n
These are like those used in private sector jobs and rely on investment growth to fund workers\u2019 retirements.<\/p>\n
\u2018Concern\u2019 that teachers don\u2019t know how good their pensions are<\/p>\n
Retirement experts have said that the lack of recognition from teachers as to how good their pensions are is concerning.<\/p>\n
The pensions are expensive to fund, with schools paying 28.68 per cent of employees\u2019 eligible wages into the TPS to continue funding the scheme, as opposed to a mandatory 3 per cent contribution in the private sector.<\/p>\n
Steve Renfrew, pension expert at Wesleyan Financial Services, said the TPS was \u201cone of the most generous pension arrangements in the UK\u201d but that perceptions of the value were potentially being affected by complexity.<\/p>\n
He said: \u201cMany teachers have to take on significantly more responsibility and workloads are rising to punishing levels.<\/p>\n
\u201cMany are increasingly dipping into their own pockets for classroom supplies, and in some cases even food, clothing and equipment for pupils. It\u2019s no surprise that when the demands of the job rise, perceptions of the overall reward package change too.<\/p>\n
\u201cAt the same time, complexity affects how the TPS is valued. The benefits are significant, but the scheme is notoriously hard to understand and around one in five teachers tell us the information they receive about their benefits isn\u2019t clear. If you\u2019re not sure what you\u2019re entitled to, it\u2019s naturally hard to judge its full value.\u201d<\/p>\n
Public sector pensions explained<\/p>\n
The TPS is a defined benefit (DB)\u00a0pension scheme. This is different to the defined contribution (DC) pension schemes most private sector workers have.<\/p>\n
Under the TPS scheme, staff contribute a minimum of 7.4 per cent of their salary and schools contribute 28.68 per cent, which is\u00a0used to fund the pensions of current retirees.<\/p>\n
The employee builds up an entitlement for their retirement and this is usually worth 1\/57 of their annual pensionable pay for each year they work.<\/p>\n
In the private sector, employees generally pay a minimum of 5 per cent of their salary into their retirement pots and their employers top this up with an extra 3 per cent. But what the staff member gets in retirement depends on how their investments perform and is not guaranteed.<\/p>\n
Tom Selby, head of public policy at investment firm AJ Bell, said pensions should be a key point of public sector recruitment.<\/p>\n
\u201cThese findings should be of concern to the government, public sector employers and taxpayers, who ultimately help fund the valuable pensions enjoyed by teachers.<\/p>\n
\u201cGiven that teachers\u2019 pensions are in fact the gold standard of retirement provision and far more generous than those available to most private sector workers, the suggestion that the vast majority do not view the arrangements as \u2018very good\u2019 suggests significant work needs to be done to better promote the benefit.<\/p>\n
\u201cThe availability of a gold-plated DB pension should be seen by public sector employers as one of the key recruitment and retention tools at their disposal, so boosting awareness of its value is essential to attracting and retaining talent within the British education system.\u201d<\/p>\n
Worsening pension scheme affecting perceptions<\/p>\n
Another key factor affecting teachers\u2019 perceptions of their pension scheme may be that the generosity of the plan used to be even greater.<\/p>\n
In 2015, a series of reforms were made to public sector pensions.<\/p>\n
The way payments were calculated was altered \u2013 with final salary schemes replaced with career average ones \u2013 and the age at which pensions could be accessed was raised for some staff.<\/p>\n
The polling suggests many teachers are aware of this, with 71 per cent of respondents saying the TPS is not as generous as it used to be.<\/p>\n
Is it time to change the TPS?<\/p>\n
There has been much debate in recent years about changing the TPS in the future because of the cost.<\/p>\n
Recent figures from polling app TeacherTapp for an Education Policy Institute report found that one in six teachers would prioritise an immediate salary increase over retirement benefits.<\/p>\n
One set of schools tried to do this in 2025, but was blocked by the Government<\/a>.<\/p>\nPart of the difficulty is that it would cause short-term funding problems for current retirees\u2019 pension payments, as these are partly funded by contributions from current teachers.<\/p>\n
The Policy Exchange thinktank has called for a wider shift from DB to DC pensions in the public sector. It says there would be a short-term cost to this policy but that estimated annual savings could be \u00a337.4bn 50 years after adoption.<\/p>\n
Ben Sweetman, head of data analytics at Policy Exchange, said: \u201cPublic servants often undervalue their pensions relative to the cost borne by taxpayers, with many even opting out of these generous schemes.<\/p>\n
\u201cAs we suggested in our report \u2018Public Sector Pension Reform\u2019, new public servants should be moved onto defined contribution pension schemes \u2013 and some of the resultant savings could be used to bolster salaries.\u201d<\/p>\n
The Department for Education was contacted for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"The Teachers’ Pension Scheme (TPS) is ‘one of the most generous in the UK’, one expert says Teacher…\n","protected":false},"author":2,"featured_media":305067,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,1558,174,175,1611],"class_list":{"0":"post-305066","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-ie","11":"tag-ireland","12":"tag-pensions","13":"tag-personal-finance","14":"tag-personalfinance","15":"tag-retirement"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/305066","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=305066"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/305066\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/305067"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=305066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=305066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=305066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}