Unions fight pension plan

June 16, 1995

Higher and further education unions are opposing the Government's plans to privatise the administration of the Teachers Pensions Scheme, to which tens of thousands of their members belong, on the grounds that no case has been made for substantial savings or improved efficiency.

Natfhe, the university and college lecturers' union and the Association of University and College Lecturers, which have around 65,000 members in the scheme, say that no logical reason was put forward for its administration to change. Nor were any figures given as to possible savings.

Christine Cheeseman, AUCL chief executive said: "How can they justify going for tenders when only three out of the 100 who responded to the consultation process were in favour of the change, and of those two were possible tenderers? There has been no criticism of the scheme."

Joan Gordon, from Natfhe's pensions department, said: "Certain assertions were made about savings but without substantiation. If employers are going to have to pay then this will be a further demand on already depleted funds. TPA gives a good service and is very knowledgeable. Losing that expertise, particularly on such a large and complicated scheme, can only lead to problems."

Last week, the Government invited tenders for contracts to run the scheme, which is statutory and unfunded and is currently administered by the Teachers Pension Agency based in Darlington. This follows a report by KPMG, the consultants, which concluded that a contract with a private sector company could lead to substantial savings. According to the Department for Education the scheme costs Pounds 14.6 million a year to run, has more than one million members and pays out around Pounds 2.8 billion in benefits annually.

Announcing the plan, Robin Squire, education minister, said that a contract would only be granted if it provided better value for money, keeping the same high standard of service than the current scheme. Any contract would start in late 1996.

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