Teacher's Pension Scheme Reforms in the UK Essay

Teachers Pension Scheme Reforms in the UK - study ExampleIssues involved in the scheme The TPS of UK currently assumes a defined benefit scheme of utmost examination profits of teachers. This translates into the fact that retirement benefits, as well as the final salary of individual teachers, is found on the length a teacher has been in service. This has seen calculation of final salary of retirement benefits base on either the best of a teachers salary within the twelve months beforehand retirement, or calculated as the best reasonable of any three successive years of salary in the last ten years. However, the union chiefs hand taken a stand to demand the reclamation of the method that is being utilize in the calculation of the retirement benefits. The chiefs argue that this method of calculating final salary is unfair, for it only benefits high flyers at the expense of mild flyers that are in the same professed(prenominal) groups. Conversely, the government is of the o pinion that it is the way to go, and, therefore, rooting for the maintenance of the scheme only that the final salary be replaced by a revalued earning scheme that is career averaged (Lewicki et al, 56). Another issue is the retirement age where it has been noted that invigoration expectancy of people in UK is on the rise. This means that retiring at 60 results into teachers spending about 40% of their lives in retirement as compared to earlier years like 1955 when life expectancy was low (Department of Education, 1). Government ministers demand that the retirement age take into account the increases in the life expectancy, in sum total to, reformation of the normal pension age so that it corresponds with the state pension age. However, the union chiefs are fence to the increase in pension age to 65. In terms of contributions, the issue is the monthly contributions to teachers pensions. The government is of the belief that the monthly contributions be increased and that the con tribution levels be tied to the earning s to protect the low back up teachers. However, union chiefs are opposed to this, for this will only function tofavor the employers who will have an f number hand in determining the teachers pensions. The final issue is the issue regarding returning to work after a teacher retires. The union chiefs root for abatement of teachers pension as the government root for a diminution of pension on return with an increase upon retirement. Tactics employed The government ministers meet is the increasing cost of running the TPS which is purely unfunded. This means that the contributions paid by both employers and employees are the ones used to pay out pension benefits to teachers by the government department (Education Department, 1). Therefore, in a way of top these funds as well as allowing for saving, the government figured out on how they can have teachers themselves contribute to this plan. This was transferred to the monthly contributions teac hers make to the TPS. It was, thus, consequential that teachers contributions be increased by an average of 3.2 percent that is from 6.4 percent to 9.6% by 2014. This may translate to a person earning forty thousand dollars sightedness an increase of up to 64% in the monthly contributions (Lewicki et al, 1). However, this is under the disguise of