UK - Scheme funding problems have been blamed for a wave of cutbacks at schools and the first-time fall in GCSE pass rates.
The Secondary Heads’ Association claims increased pension contributions wiped £650m off education authorities’ budgets last year and forced many schools to lay-off staff.
The government has pledged an additional £800m for 2004-05 to help compensate for the drain on school budgets. But many believe this will too little, too late.
Liberal Democrat MP for North Norfolk Norman Lamb said scores of schools in his constituency had been forced to lay off teachers, cut equipment budgets and dip into their repair fund to make ends meet.
He pointed to increased pensions costs and higher National Insurance rates as the major factors behind the cutbacks.
Lamb said: “My clear understanding is that out of the extra money – which on the face we thought would increase in real terms school budgets – a high proportion went on National Insurance and superannuation. “So in real terms the increase was very small and in some cases negative.”
Secondary Heads’ Association general secretary John Dunford agreed. “The change in teachers’ pension arrangements has been one factor in causing the funding problems in schools.
“We knew in advance the extent of the increase in pension contributions, but this increase came at the same time as many other changes in school funding methods and the result was a reduction in the amount of money available. So the budget did not cover the expected increases.”Dunford said the effect on budgets was partly to blame for the dip in GCSE grades.
But the department for education and skills stressed that pensions increases had been taken into account for in this year’s £2.5bn budget.And a spokeswoman said it was not correct to correlate GCSE grades with school funding.
Johnson Controls International has appointed XPS Pensions as investment and actuarial adviser for two of its schemes, following a competitive tender process.
Merseyside Pension Fund has allocated an initial £400m of assets to a smart sustainability fund managed by State Street Global Advisors (SSGA).
This week's top stories included exclusive coverage of The Pensions Regulator's plans to require schemes to use professional trustees.
Buck has launched a solution to help pension schemes equalise guaranteed minimum pensions (GMPs) in a cost effective way with minimum hassle.