New TPS entrants will retire at 65 in post-92 institutions. Claire Sanders reports.
The pension age for academics starting their careers in new universities is now 65, bringing them into line with academics in old universities.
The Teachers' Pensions Scheme, which covers academics in new universities as well as schoolteachers and further education lecturers, announced proposals for a major reform package last week. It is the result of months of negotiations between unions, employers and the Department for Education and Skills. The pension age of existing members of the TPS will stay at 60, but will rise to 65 for new entrants. The pension age of academics in the Universities Superannuation Scheme, in essence those in old universities, is already 65, although many academics choose to retire before then.
Geraldine Egan, pension policy officer for the new University and College Union, formerly the Association of University Teachers and Natfhe, said:
"We believe this is a good package for members. It is sustainable in the long term and in certain key ways brings the two academic pension schemes closer together."
The unions fought hard to keep the pension age for existing members at 60.
"It is important to note that new members will benefit in terms of a better annual pension from the extra years that they work," Ms Egan said.
Part-time staff will now be automatically included in the TPS, rather than having to opt in.
The TPS will remain a final-salary scheme - meaning that members' pensions are determined by their final salary and length of service. However, the final salary for both new and existing members will be either their actual final salary or the average of their best three years of salary over a ten-year period.
"This will mean that academics who have stood down from top jobs but remained working for the institution are not disadvantaged," Ms Egan said.
She said that these arrangements also brought the TPS more in line with the USS.
The new scheme will also build on the flexibility already in the TPS and allow even greater scope for phased retirement. This is an area where there could be divergence with the USS, which has a less flexible approach.
Declan Leyden, assistant director of the Universities and Colleges Employers' Association, said: "This is a good deal for universities and lecturers. It provides for a financially viable and sustainable pension scheme that will greatly assist recruitment and retention of staff well into the future."
The USS has published a statement insisting that it is fully-funded and not facing a £6.6 billion deficit, as reported in the press this week.
"USS has hugely positive cash flows - income into the fund exceeding benefit payments by some £800 million a year for the foreseeable future - and the trustee board takes a long-term approach," it said.