Teachers' Pension Scheme - Where Are We Now?
The Government has published its response to the recent consultation on the methodology used to set the SCAPE discount rate and concludes it does not intend to modify the methodology. What does this mean for independent schools?
Well, the published Treasury statement makes clear, this will lead to higher employer contribution rates for most unfunded public service pension schemes, of which TPS is one.
The statement also makes clear the Government's commitment to fund the increase arisen as a consequence of the changes to the SCAPE discount rate; that commitment however is to employers where costs are funded centrally, so once again excluding independent schools.
Whilst we are aware higher employer contributions are now expected, the rates may not be published prior to September 2023, for implementation from April 2024 (as per the Treasury's statement). Whether this is postponed to September, as it was in 2019, remains unknown; the Treasury's statement appears definitive however: "Valuations as at 31 March 2020 are currently underway and will result in new employer contribution rates which will be implemented from April 2024".
Whilst many independent schools have either withdrawn from, or changed their approach to TPS, there remains a proportion of schools which have yet to decide on next steps. The Government's response to the consultation is perhaps sufficiently telling for schools and governing bodies to now revisit their options and plan for transparent staff engagement in good time - which might be sooner than initially thought.
Our table of options acts as a useful snapshot of the various models available to you.