Robin Hood in Reverse

Head teachers in England, Wales and Northern Ireland have apparently voted for a ballot on industrial action - over planned changes to their pension scheme.

The NAHT - the 'headies union' - has described plans to replace the present final salary scheme with a career average pension - as a 'betrayal'.

Which just goes to show that head teachers - or at least those attending the union's annual conference - are living on a completely different planet from the rest of us.

How so?

Because as I've said numerous times on the blog site - under a final salary pensions scheme the lower paid are subsidising the higher paid and - in fact - head teachers are a particularly good example.

A head teacher might assume the top job for - let's say - the last 10 years of their teaching career which might last 40 years in total.

So a final salary of - let's say - £70,000 a year is the figure used to calculate the value of their future pension - which would work out at £35,000 a year for the rest of their life.

For for the bulk of their entire teaching career the head teacher may have been earning - let's say - £30,000 a year.

Which means that the head teacher ends up with a pension worth much more than they have put into the scheme over 40 years - and that's not even taking into account the tax free lump sum.

A career average scheme would pay a pension based on head teacher's average salary over the whole 40 years - which in this example would out at £20,000 a year instead of £35,000.

The difference between the two schemes is being subsidised by other much lower paid workers - like the low paid, part-time school cleaner - or the low paid, part-time worker in the schools meals service.

So if anyone should feel betrayed - it's the lower paid council workers who have been subsidising the much more generous pensions of head teachers - for all these years.

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