Schools facing a 5 per cent hike in employer contributions to the Teachers Pension Scheme may be forced to leave the TPS, putting teaching professionals at risk of poorer retirement outcomes, a union has warned.
Independent schools face mounting cost pressures as employer contribution rates will rise to 28.6 per cent from April 1 2024.
Royal London has warned that this hike, combined with cost pressures in other areas, may result in further independent schools exiting the TPS.
As reported by FTAdviser previously, several independent schools have chosen to leave the TPS in favour of a defined contribution scheme since 2019, when the employer contribution rate rose from 16.4 per cent to 23.6 per cent.
But according to Justin Corliss, senior pensions development manager at Royal London, the changes announced by the government may challenge the future affordability of the TPS for independent schools, especially at a time when they face rising costs across the board.
He said: "The latest increase may result in independent schools seeking alternative pension options to manage immediate cost challenges and to provide greater certainty around future costs.
“A rate rise of over 20 per cent is difficult to absorb in the best of times, but with independent schools already facing pressures to maintain pupil numbers and restrict fee increases as much as possible, this latest cost hike could drive the need to take action.”
Daniel Kebede, general secretary of the National Education Union, said the union would "robustly support" members to defend their terms and conditions.
Kebede said: "Our members working in independent schools are dedicated professionals, committed to and working hard on behalf of their pupils. They have earned their pensions.
“To face the threat of losing a decent pension is unacceptable. It should set alarm bells ringing across society."
Salary bands for TPS Employee Contributions:
The NEU said attracting top quality graduates to the teaching profession was "mission critical to the country’s future prosperity", and warned this would not happen with the erosion of both pay and pensions.
Kebede added: “The government needs to find a cohesive plan for the whole teaching profession. They must ensure that remuneration is attractive and working hours reasonable. Gillian Keegan needs to demonstrate the value she places on educating our children.
“To those employers considering seeking to enforce detrimental change against staff wishes using the pernicious practice of ‘fire and rehire’, the NEU cautions them to consider very carefully the damage it will cause to staff morale.
"We will fight employers industrially on this.
“The NEU is not prepared to sit back while our members see their contracts of employment ripped up and their pensions snatched away. The NEU will robustly support our members to take all necessary action to defend their terms and conditions.
Incorrect records
According to the NEU, there have been many reports of pension records being incorrect.
In a statement, the NEU said: "The growing fragmentation of the school system means a growing number of small employers, and more changes of employer for teachers over their careers. These are perfect conditions for mistakes to be made."
