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Teachers' Pension Scheme - Consultation on Phased Withdrawal

on Wednesday, 11 September 2019.

The Department for Education (DfE) announced on 9 September 2019 that it is now consulting on a proposal to amend the Teachers' Pension Scheme (TPS) rules to enable independent schools to withdraw from the TPS on a phased basis.

Under phased withdrawal schools will be able to opt out of the TPS in respect of new staff whilst allowing existing staff to remain as active members.

The consultation closes on 3 November 2019.

What Are the Main Proposals?

  • Whilst existing members of the TPS would be able to remain in the TPS, schools could make an alternative pension scheme available to both new starters and any existing staff who wish to opt out of the TPS.

  • New starters who had been active TPS members in their previous employment will not be able to join the TPS in their new employment if their new employer is adopting phased withdrawal.

  • Staff who opted out of the TPS prior to a school's decision to adopt phased withdrawal would be able to opt back in to the TPS with that employer at a later date.

  • Staff who opted out of the TPS after a school's decision to adopt phased withdrawal would not be able to opt back in to the TPS with that employer at a later date.

  • Schools who decide to adopt phased withdrawal would be able to return to the TPS on a full basis at a later date but would need to enroll all eligible staff.

Why Is the DfE Consulting?

The aim of the proposal is to mitigate the costs of the increases in the employer's contribution to the TPS effective from 1 September 2019, whilst protecting the benefits of existing staff.

The specific questions that the consultation seeks to answer are:

  • Would phased withdrawal help with mitigating costs?

  • Would phased withdrawal protect existing staff?

  • Are there any alternatives to mitigate the financial pressures upon schools?

Notwithstanding the outcome of this consultation, it is worth remembering that schools can already operate the TPS alongside an alternative scheme should they wish to do so.

The key difference between phased withdrawal and the current options available to schools is that currently all staff must have the option of joining the TPS. That would change if the phased withdrawal proposal is introduced with the TPS being closed off to new staff.

We are currently supporting lots of schools with considering their positions in respect of the TPS. To discuss how we can support your school, please contact Naseem Nabi on 0117 314 5630 or Nick Murrell on 0117 314 5627. Alternatively, please complete the below form. 

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