Govt launches independent school pension consultation

The government has launched a consultation asking whether independent schools should be able to opt out of the Teachers’ Pension Scheme while allowing existing staff to remain as active members.

It hopes to gather views on whether independent schoolteachers in England and Wales should be offered greater flexibility on their pensions.

Under current scheme rules, an independent school electing to opt out of the scheme results in all members becoming deferred.

The consultation asks whether respondents agree that a phased withdrawal would help independent school manage the financial pressures incurred from the additional costs of employer contributions into the Teachers Pension Scheme.

It also asked if a phased member withdrawal would protect teachers that are currently participated in the scheme, and whether there were any alternative methods, other than government funding, which would help independent school manage the existing financial pressure while protecting scheme members.

If approved, the proposals would allow independent schools to enrol new employees into a DC pension scheme, while existing staff can remain in the DB scheme.

The consultation closes to responses on 3 November 2019.

Earlier this month (2 September), the Teachers’ Pension Scheme had its employer contributions increased to 23.6 per cent, which the Department for Education expects to cost around £1.5bn each year.

Additionally, the government could be facing legal action on the grounds of age discrimination from teachers who were transferred to a less beneficial scheme, while older members were allowed to remain in the old scheme.

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