Schools opting out of TPS urged to ‘shop around’

Independent schools opting out of the Teachers' Pension Scheme (TPS) have been urged to “shop around” and take advice before choosing a new pension arrangement.

More than 60 independent schools have notified the government that they intend to withdraw from the TPS following a government consultation which asked whether independent schools should be allowed to opt out of the scheme.

“Until relatively recently, most of those responsible for running independent schools have not really had to give much thought to pensions,” commented Royal London director of policy, Steve Webb. “But increased cost pressures from government have led more schools to review their pension arrangements.

“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.”

Some schools have offered their staff a hybrid option, which would allow some teahcers to remain in the TPS.

Following financial advice, Taunton School in Somerset set up a hybrid system, which allows staff to stay in the TPS if they are prepared to fund the increased contributions, or opt out and receive a arrangement of similar value to a private scheme.

Taunton School chief operating officer, Nicola Miller, added: “We have all been on a steep learning curve when it comes to pensions.

When we talked to our colleagues, we found that they wanted a range of different things.

“Some wanted to remain in the TPS and were prepared to pay extra to do so. Some were happy to opt out of the TPS and have us pay contributions into a private pension, whilst a few wanted to pull out of pensions altogether.

“We benefited from taking expert advice and from talking to a range of pension providers before setting up an arrangement that we think works best for our people.”

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