Teachers’ Pension Scheme (TPS) has changed considerably over the last 14 years – do your Common Room understand how?
Author: Ann McDonald, Head of Succession Independent Schools
The TPS has undergone significant changes twice in the last 14 years, but there have also been subtle changes far more regularly than that during this time. When you add to that the changes that successive Governments have made to pensions generally over the same period, the final outcome may be very different to what many teachers expected.
Just to add another factor into the mix, this year the Government has been forced to make further changes to all public service pension schemes (including the TPS) after losing the Sargeant and McCloud legal cases (the firefighters and judges age discrimination claim). The Government Consultation only ended on 11th October 2020, so we are still waiting for them to make their final decision on the changes that will be made, but we can see what they want to happen based on what was proposed. The main headlines are:
From 1st April 2022 members of the TPS will only be able to accrue benefits in the Career Average Scheme, no further benefits will be accrued in either Final Salary arrangement
- Certain members (those that were a member of the Scheme as at 31st March 2012) will be given a choice of whether to keep any Career Average benefits they have accrued, or swap it for more service in the Final Salary Scheme they were a member of when the Career Average Scheme was introduced
- The Government were not suggesting that members would have to make a quick decision on whether to keep Career Average benefits, or swap back to Final Salary
- The cost of providing this option (across all public service pension schemes) is estimated to be £17bn
- They stated that they would consider increasing both employer and employee contributions in order to cover this additional cost
Providing education on TPS for your Common Room on what they are getting from being a member has probably never been so important, whether your School intends to look at withdrawing from the TPS or not. As TPS becomes a hot topic within Common Rooms with stories of independent schools leaving the Scheme circulate, there can be a considerable amount of anxiety. Why not take the opportunity to provide clarity instead?
Succession Independent Schools, supporters of the Independent Schools Conference 2020, are one of the longest-running, specialist teams providing support within the Sector and are retained by many of the country’s leading Independent Schools. Their knowledge of the TPS, the changes that have been made to the Scheme (and pensions generally) and our ability to communicate these complicated matters in plain, understandable English has been welcomed at many schools up and down the country from Cornwall to Scotland.