31: Consultation on draft Teachers’ Pension Scheme regulations launched

The Department for Education (DfE) has opened a consultation on its draft Teachers’ Pension scheme (TPS) regulations. The provisions will enable independent schools to amend survivor benefits and pursue a phased withdrawal from the TPS.

The original plan had been to bring the regulations into force this Spring, but the DfE is now working to 1 August 2021. This publication date means timings will be relatively tight, but schools could potentially implement a phased withdrawal from the autumn term. It will be interesting to see how many schools take up this option; it will be welcomed by existing teachers as an alternative to complete withdrawal, but it doesn’t solve the short/medium term financial headache caused by the hike in contribution levels.

Phased withdrawal

We reported in November on the DfE’s decision to make phased withdrawal from the TPS available to independent schools.

Under a phased withdrawal, schools will be able to opt to freeze participation in the TPS from a certain date so that, broadly, staff already in the TPS on that date would remain in the scheme, but staff joining subsequently would not be enrolled in the TPS, but would be offered alternative provision (giving rise to what is sometimes known as the mixed economy option).

The introduction of the phased withdrawal option stemmed from a concern that the relatively sudden departure of large numbers of schools from the TPS (as a result of the significant increase in the costs of the TPS’ since 2019) would have a detrimental financial impact on the scheme itself; the idea of phased withdrawal being that some schools might decide to opt for a phased instead of a complete withdrawal.

The DfE has now prepared the draft TPS regulations, which will amend the existing TPS legislation and aim to address the concerns voiced in the last consultation round. In particular, the regulations would now enable an independent school that has opted for phased withdrawal to decide to fully re-join the TPS at a future date. In addition, and to address one of the equality concerns raised in the previous consultation, the amendments would enable a teacher who has had to leave pensionable service for a period of up to 5 years due to sick or family leave to re-join the TPS on return to their school (where that school has stayed in the TPS / opted for a phased withdrawal).

Survivor benefits

The amendments to the regulations also aim to provide female members in an opposite-sex marriage or civil partnership with equal survivor pension rights as would be provided to female members in a same-sex marriage or civil partnership.

Next steps

The consultation is open until 1 June 2021 and the intention is for the regulations to be put in place for 1 August 2021, allowing phased withdrawal from September 2021.

More information on the consultation can be found in the DfE’s consultation document and you can submit an online response here.