On the go: The number of private schools opting out of the Teachers’ Pension Scheme to avoid a significant hike in contributions has increased by more than a third in the past six months.
According to a Freedom of Information request submitted by specialist advice company Wesleyan to the Department for Education, since September 2019 the number of schools opting out of the scheme has increased by 34 per cent since contributions to the TPS increased by 40 per cent in September.
Twenty-seven schools have newly notified the DfE of an intention to withdraw from their pension schemes, bringing the total number of withdrawals from the scheme since the changes were first announced in September 2018 to 107.
Last year, employer contributions increased to 23.6 per cent from 16.48 per cent, following the government’s announcement that it would be changing the rate used to calculate the liabilities of public sector schemes.
And 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.
It has been confirmed by the National Education Union that some teachers at private schools plan to stage walkouts this week over the changes to the scheme.Parminder Gill, advice policy consultant at Wesleyan, said: “Independent schools are having to look more closely at their budgets, and examine options like increasing fees, to establish if they can afford to maintain their membership of the TPS. For some, the numbers simply don’t add up.
“When the 40 per cent increase in contributions took effect in September last year, some independent schools adopted a wait-and-see approach, but now many are deciding to walk away from the scheme all together."
Former pensions minister Steve Webb has previously warned private schools opting out of the scheme to seek help from an adviser before making alternative arrangements.
Sir Steve, a partner at LCP, said: “This is a complex business, and there’s no single solution that will necessarily be right for all schools. Teachers will expect their schools to have taken advice and shopped around for the scheme that best meets their needs.”
This article originally appeared on FTAdviser.com.
