Responding to today’s announcement of a 5% increase to the employer’s contribution to the Teachers’ Pension Scheme (TPS), the National Education Union has vowed to provide robust support to members working in the independent sector, whose pensions might be threatened as a consequence of the rise.
The cost for teachers working in local authority and academy schools will be paid by the government for 2024-2025; independent schools will have to meet the rise in full.
Some private schools will seek to leave the scheme, which would lead to their teacher staff having significantly worse pensions. Others may seek ‘phased withdrawal’, ostensibly protecting teachers currently in the scheme while putting new teachers on inferior defined contribution provision.
The TPS has a valuation every four years.
Despite lower-than-expected pay rises and a fall in the expected rise in life expectancy – which would point to a reduction in contribution rates - in the 2020 valuation, the liabilities have increased on account of a technical change imposed by the government. The discount rate – the formula used to calculate the rate of interest on assets and liabilities – has been altered from CPI+2.4 per cent to CPI+1.7 per cent. This has had the effect of increasing the employer contribution from 23.6% to 28.6%.
This technical change to the way in which the scheme is valued will have serious detrimental consequences for some teachers working in the independent sector and ramifications for all. The government needs a cohesive strategy for the profession as a whole.
It will divide the profession into those who have a good pension and those who do not.
Commenting on the change, Daniel Kebede, General Secretary of the National Education Union, 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.
“Attracting top quality graduates to the teaching profession is mission critical to the country’s future prosperity. This will not happen with the erosion of both pay and pensions.
“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.”