Teachers' Pension Scheme - The Latest Developments

Many schools are moving forward with plans to implement change, varying from withdrawal from TPS to remaining in it, with contractual variations.

Parallel Pension Schemes

There continues to be much debate about the operation of parallel pension schemes, with the ability to cap total pay and benefits and to help manage the increased costs. We understand the importance to schools of assessing all the available options in this developing area given the potential impact. Accordingly, we have invested in obtaining QC's advice to confirm that this option is legally viable, as long as it is structured carefully. We have developed some FAQs about this approach to help provide better insight to aid discussions with trustees and governing bodies.

We have also updated our TPS options table. Schools will have many reasons for adopting different models in response to the TPS challenge, and we will be delighted to support schools in making the right decision for their teachers and community.

Salary Sacrifice

Many schools and their staff, over the years, will have benefitted from salary sacrifice schemes (when the employee exchanges part of their salary for benefits from their employer) and the tax savings they have brought. When assessing TPS options, it is important to be aware that:

• Salary sacrifice arrangements for school fees will end on 6 April 2021. Schools must at that time factor in the additional cost of staff reverting to full pensionable pay at the employer contribution rate of 23.68%. For schools with a significant number of staff on such arrangements, the additional cost could be significant; this may be a factor supporting a school's decision to withdraw from the scheme.

• For schools withdrawing from TPS, this may impact on the value of accrued pension rights, as accrual calculation will be based on the reduced salary. The detail is beyond the scope of this article. Schools should be aware of this and ensure they raise it with their pension advisors.

eLearning Solutions under VWV Plus

Effective consultation with staff is key to the successful implementation of any change. eLearning Solutions can support the consultation process at your school by helping you to circulate proposals, briefing notes, updates from the SLT, FAQs, consultation feedback and proposed contractual variations to all affected staff. The software tracks that the documents have been read and records changes agreed by staff members at the conclusion of the consultation process.

Visit our website, or get in touch with Imogen Street at istreet@vwv.co.uk or on 07384 545998 to find out more.

If your school would like any help surrounding the Teachers' Pension Scheme, please contact Naseem Nabi on 0117 314 5630, Alice Reeve on 0117 314 5383 or Simon Bevan on 0117 314 5238, in our Employment Law team, or complete the below form.