UK - The government hopes to lure disillusioned City workers into teaching by offering them a safe, public sector final salary scheme.
The Teacher Training Agency – the government agency responsible for recruiting teachers – is looking at including pensions as part of its ongoing campaign to boost the number of teachers.
It believes the unfunded 1/80th final salary scheme will help lure disillusioned workers in the financial services sector and others into the profession.
A TTA spokeswoman said: “This is something we’re considering adding into the mixture of things that we talk about when we tell people about teaching as a career.
“What we’re seeking to do is tap into the pool of people out there who are graduates that are enduring unfulfilling jobs, in environments that they do not wish to be in. Those are the people we’re targeting – and that includes the City.”
Teachers currently pay 6% of their salaries into the scheme, while employer contributions are set at 13.5%. The pensions are index-linked, with members receiving a guaranteed tax free lump sum at 60, ill-health benefits and children’s and dependants’ pensions.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.