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    Are you an independent school thinking about leaving the TPS?

    14 December 2020

    Graeme Bell

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    2 minute read

    Why it could be time to talk...

    Thinking of leaving the TPS?

    Independent schools nationally are facing increasing challenges in terms of fees and falling student numbers, while costs are increasing. Covid-19 adds a further difficulty to the list, as schools make expensive adaptations to premises or procedures simply in order to keep their doors open.

    Quite apart from the pandemic, one of the ongoing issues many schools are facing is the increasing cost of providing teachers with membership of a defined benefit (DB) pension scheme such as the Teachers' Pension Scheme (England & Wales) and Scottish Teachers’ Pension and Superannuation Schemes (Scotland).

    One recent article suggests that employer pension contributions within the TPS and associated schemes may rise to 30% in 2023, which would make continued membership of the schemes even more of a drain on budgets than it already is.

    Why leaving the TPS might make sense to everyone

    We know from experience that many schools are looking to deal with these increasing costs by making a move away from their existing schemes, but are struggling to communicate this to their members in a way that demonstrates their continued support for staff.

    If employer contribution rates were to be confirmed at around about 30%, would it change your thinking around the sustainability of ongoing participation in the teachers’ DB pension schemes?

    In addition, if the cost increase was shared, with teachers also forced to pay a higher contribution rate, which has been the approach recently, do you think teachers would be more open and collaborative around exploring potential alternative solutions?

    Communication is key

    If you’re considering a move away from your existing staff pension scheme, it’s crucial that you communicate well with staff.

    Historically, the TPS, STPS and STSS have been very valuable benefits so it’s vital that you deliver a clear message to staff around the need and rationale for change, as well as providing important pension education to help them understand the move.

    In our experience, clear, accurate and open discussions through the change process are key to ensuring the teaching staff continue to value the overall benefits they receive from you as their employer.

    Our advice to any school looking to leave the teachers’ pension schemes is that you consider carefully your business case and the future benefit structure. 

    It should also be noted that in November 2020 the Government confirmed that in 2021 it will legislate to allow phased withdrawal from the TPS, which may be another option you wish to consider.

    We are understandably seeing increased scrutiny from teachers and unions so this decision cannot be rushed, must be clearly justifiable and must provide a well-rounded and valued alternative benefit to staff to ensure that the change can be achieved with current staff, and that it will support recruitment and retention going forward.

    To find out more please visit our comprehensive web resource: A complete guide to pension challenges faced by independent schools'

    To talk about how we can help you, click here to contact us.

    Related Resource

    4 top tips for changing your teachers' pension scheme

    If you’re considering a move away from your existing staff pension scheme, it’s crucial that you communicate well with staff.

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