On the go: Covid-19 has prompted a number of private schools opt out of the Teachers’ Pension Scheme as they look to avoid a significant hike in contributions.
According to a freedom of information request submitted by specialist advice company Wesleyan to the Department for Education, since September 2019 — when contributions to the Teachers’ Pension Scheme increased by 40 per cent — a total of 177 schools have left the scheme.
The majority of withdrawals were triggered by an increase in contribution levels, but out of the 177 schools, 64 pulled out following the coronavirus outbreak in March.
Last year, employer contributions increased from 16.48 per cent to 23.6 per cent following the government’s move to change the rate used to calculate the liabilities of public sector schemes.
While the government decided in April to fund state schools and further education colleges to the tune of £830m and £80m, respectively, private schools will have to find their own funds to cover the additional cost.
Parminder Gill, advice policy consultant at Wesleyan, said Covid-19 has caused even more schools to pull out of the scheme as they struggle to afford the increase in rates.
“The number of independent schools opting to leave the TPS is rising at an alarming rate, putting thousands of teachers into less-generous schemes,” he said.
“Although we saw an initial jump in the number of schools opting to leave the scheme following the rise in employer contributions last September, this has accelerated sharply as schools began to get a clearer picture of the long-term financial implications of meeting the additional costs.
“With the events of the recent lockdown placing increased pressure on school budgets, many more schools are assessing their TPS options right now to see if they can afford to maintain their membership.”
This story originally appeared on ftadviser.com
