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Pensions

Volume 451: debated on Wednesday 1 November 2006

To ask the Secretary of State for Education and Skills how much was spent on the Teachers Pension Scheme in each year since 1980-81; what forecasts he has made of how much will be spent in each year between 2007-08 and 2050-51; and how many members of the scheme there are. (96004)

The following table provides the available figures for gross expenditure against the Teachers' Pension Scheme (TPS) for financial years 1991-92 to 2005-06. Estimates for future years are included within the total figures for gross spending on unfunded pension schemes that were published in the December 2005 ‘Long-term Public Finance’ report by HM Treasury. The TPS Accounts for 2005-06 cited 590,032 active members, 391,016 deferred members and 488,132 pensioner members.

Expenditure against the TPS (all figures shown on cash basis)

£ billion

1991-92

2.161

1992-93

2.395

1993-94

2.635

1994-95

2.709

1995-96

2.937

1996-97

3,254

1997-98

3.643

1998-99

3.378

1999-00

3.577

2000-01

3.716

2001-02

3.957

2002-03

4.205

2003-04

4.428

2004-05

4.747

2005-06

5.099

To ask the Secretary of State for Education and Skills (1) what the current (a) accrual rate and (b) normal retirement age is for each public sector pension scheme for which his Department is responsible; and if he will make a statement; (96042)

(2) what the (a) present and (b) future retirement age arrangements are for each public sector pension scheme for which his Department has responsibility; and if he will make a statement.

Under the provisions of the Teachers' Pension Scheme, existing members have a normal pension age of 60 and accrue pension benefits at a rate of 1/80th and a lump sum at a rate of 3/80ths of salary for each year of service. New entrants to the TPS from 1 January 2007 will have a normal pension age of 65 and will accrue pension at a rate of 1/60th of salary for each year with the option to commute part of their pension benefits in return for a lump sum.

To ask the Secretary of State for Education and Skills what the current estimate is of the unfunded liability, in present value terms, of each public sector pension scheme for which his Department is responsible; and on what assumptions for (a) discount rate and (b) longevity the estimate is based. (96049)

The total liabilities against the Teachers' Pension Scheme as at 31 March 2006, as published in the scheme accounts, was £143 billion, based on an assumed real discount rate of 2.8 per cent. In preparing their report for the scheme accounts, the Government Actuary assumed that the life expectancy at age 60 of members currently in service would be about 27½ per cent. years for men and about 30½ per cent. years for women.

To ask the Secretary of State for Education and Skills what recent estimate he has made of the (a) rate and (b) annual cost of employer contributions in each public sector pension scheme for which his Department has responsibility; and if he will make a statement. (96062)

The current employer contribution rate for the Teachers’ Pension scheme (TPS) is 13.5 per cent. of salary, and the scheme expects to receive £2.79 billion in contributions from employers during the current financial year. Following the agreement with unions and employers on the reform of the TPS and taking account of the outcome of the 2004 valuation of the TPS, from 1st January 2007 the employer contribution rate will increase to 14.1 percent., and the employee rate will increase from 6 percent. to 6.4 percent. The reform of the TPS also includes a cap of 14 percent. on the employer contribution rate from the 2008 scheme valuation onwards.