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. 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.”
