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Teacher Pensions Aren’t A Stealth Tax Upon Universities

The basic point about pensions is that they are deferred wages. We go to work, we gain compensation for having to spend our time at work. Some of that compensation comes in having an interesting – or not – job, some comes in wages, some comes in our pension. The combination of it all – including that nice comfy chair – is the cost to our employer of getting us to turn up.

Insisting that an employer funds our pension is not a stealth tax. It’s just economic reality Our employer has to cover the cost of employing us:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Universities have accused the Treasury of levying a “stealth” tax to fund teacher pensions. The Department for Education (DfE) has revealed that employers’ contribution to the Teachers’ Pension Scheme (TPS) will rise from 16.48 per cent of their salaries to 23.6 per cent. The change, which comes into force in September, will see 70 universities pay an additional £142 million in the first year alone. The hike follows a valuation of the public service pension schemes by the Treasury. The Department for Education will provide funding to help state schools meet the extra costs for at least the first year of the new scheme, but private schools and universities will need to foot the bill themselves. Alistair Jarvis, chief executive of Universities UK said he is “disappointed” that universities have not been given any extra funding, adding: “This is effectively a stealth tax to boost the Treasury’s coffers. “Ultimately, this will have to be paid for by diverting funding from other priorities. [/perfectpullquote]

Colei* matey.

The pensions you’re promising your lecturers are part of your cost of employing them. You need to raise your prices, cut other costs, employ fewer lecturers, pay the Vice Chancellor less, whatever, in order to cover the cost of your employing the people you do.

Think of it this way. Do we say that asking Sir Philip Green to pay the pensions at BHS is a stealth tax? No, we don’t. In fact, we think it an outrage that he even thought about not doing so. So you can bugger off ‘n’all then, can’t you?


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