Its Your Money – Key Points

KEY POINTS

• Government proposal to raise minimum pension age from 60 to 65.

• From 2006 all new entrants would be on the 65 retirement age.

• For teachers currently in service under age 50 (today) each year worked from 2013 will only “pay out” at age 65. Years already worked by 2013 will still be payable at 60.

4 examples.

Teacher A – Age 50 (2003)

Service to 2003 =
25 years
Further service to 2013 =
10 years
=
35 years

In 2013 (age 60) pension = 35/80 (100% of pension)

Teacher B – Age 40 (2003)

Service to 2003 =
15 years
Further service to 2013 =
10 years
=
25 years

Further service to retirement = 10 yearsIn 2023 (age 60) pension = 25/80 (71% of pension)

Remaining 10/80 not payable until 2028 (29% of pension)

Teacher C – Age 30 (2003)

Service to 2003 =
5 years
Further service to 2013 =
10 years
=
15 years

Further service to retirement = 20 yearsIn 2033 (age 60) pension = 15/80 (42% of pension)

Remaining 20/80 not payable until 2038 (57% of pension)

Teacher D – Age 25 (2003)

Service to 2003 =
Nil years
Further service to 2013 =
10 years
=
10 years

Further service to retirement = 35 yearsIn 2038 (age 60) pension = 10/80 (29% of pension)

Remaining 25/80 not payable until 2043 (71% of pension)

Teacher E – Age 25 (2006)

All pension not payable until Age 65 (2046) (100% of pension)Will adversely affect

• Teachers

– more illness
– more deaths
• Their families
– loss of income
– loss of a teacher
• Pupils
– Effect on quality?

Leave pension age at 60

Published on 11 December 2007 - Pensions