The increase to the employer contribution rate of the Teachers' Pension Scheme (TPS) remains top of the agenda for many schools. Little wonder with an increase in the employer contribution rates from 16.48% to 23.68% in September 2019, and a further 5 percentage point increase confirmed to take effect from 1 April 2024.
With no corresponding increase in employee contributions, the burden of additional costs remains squarely with schools. Given the lack of control over pension costs, schools are considering the options available to them, including operating parallel TPS and DC pension scheme, subject to a cost cap; reviewing future pay awards or withdrawing from the TPS.
If your school is considering its options , we can provide you with tailored legal solutions.
Whether you are unsure of the steps to take to leave the Teachers' Pension Scheme, or need help preparing for a consultation, we can guide you through the process.
With no corresponding increase in employee contributions, the burden of additional costs remains squarely with schools. Based on schools' financial projections, the range of the annual increase varies considerably from £90,000 to £650,000, depending on the size of the school.
With the ongoing challenge of ensuring school fees are affordable for parents, an increase in fees to cover the costs may not in itself be an option.
Schools may want to explore other options and if consideration is to be given to moving away from the Teachers' Pension Scheme, what other pension schemes and benefits are available as a viable alternative?
The ISBA has proposed an alternative pension scheme for schools to consider, alongside any others that you may have identified.
In this article, we look at the questions most often posed by schools when considering the options.
With over more than 30 years' experience acting for independent schools, VWV is recognised as a national leader in the sector.
If you are considering withdrawing from the Teachers' Pension Scheme, our employment lawyers can provide advice tailored to your school in relation to:
VWV's education team are commercially astute and keep up to speed with trends and moves in the independent school sector - they are therefore able to provide relevant and up-to-date advice to clients.
Our independent schools lawyers have a broad variety of legal expertise and offer a full legal service to the independent schools sector
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