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Teachers' Pensions

Volume 450: debated on Monday 23 October 2006

To ask the Secretary of State for Education and Skills what the annual savings would be from increasing the employee contribution rate of the teachers' pension scheme by 1 per cent.; and if he will make a statement. (93548)

The contribution rate currently paid by members of the Teachers' Pension Scheme (IPS) is 6 per cent. of salary. 1 per cent. of salary would equate to some £205 million in this financial year.

From 1 January 2007, the IPS members' contribution rate will increase to 6.4 per cent. of salary. This is part of a package of IPS reforms that will include a normal pension age of 65 for new entrants and an agreement on an equal sharing of future cost pressures between members and employers, subject to a cap of 14 per cent. on the contribution paid by employers from the 2008 scheme valuation onwards. The overall package of reform, together with the agreement on cost sharing, will ensure the continuing financial sustainability of the TPS.