What is the context? The employer pension contribution to the Teachers’ Pension Scheme (TPS) is valued every four years. At the most recent valuation it was decided to increase the rate from 16.48% to 23.6% from this September because of a lower than anticipated economic growth forecast.
The government has said that it will fully fund this rise for state-funded schools (£830m) and FE, sixth form colleges and other training providers (£80m) in the 2019/20 financial year. It will then be a matter for the government spending review.
The government does not intend to fund the rise in HE (£80m) or independent schools (£110m). The lack of notice of this change means that independent schools have not been able to plan for it. The additional financial burden this will impose means that some independent schools are considering no longer offering access to the TPS, and instead looking for alternative pension provision for their employees.
ASCL position: Where a teacher or school or college leader meets the eligibility requirements for the Teachers’ Pension Scheme and wishes to enrol or remain in the scheme, then their employer should make this provision available.
Why are we saying it? Whilst we recognise the financial burden the increase in employer contributions will have on schools, and the disproportionate impact this will have on smaller institutions, the answer cannot be to withdraw from the TPS. Instead, employers should make every effort to make savings elsewhere in order to continue to offer access to the TPS.
Access to a high-quality pension scheme is a fundamental benefit which teachers expect to receive, regardless of the sector in which they work. Were independent schools to withdraw from the TPS, we are concerned that this would negatively impact on teachers and leaders working in the independent sector, on recruitment and retention in the sector, and on ease of movement between the state and independent sectors.