Difficult decisions for independent school governors, teachers and parents – the Teachers’ Pension Scheme

Independent schools have been rocked by the announcement in recent months of a 43% increase in employer contributions to the Teachers’ Pension Scheme (TPS) from 1 September 2019 and confirmation from the government that it will not fund the increase for independent schools.

The changes have implications for a number of stakeholders, including school governors, fee-paying parents (and their children), staff at independent schools and those who contract with such schools.

Some schools have not been able to fund the increase and have already gone through the process (including full consultation) of leaving the TPS. Independent school governors who have not had the decision forced on them will be considering the longer term affordability of the increase and the implications for the school’s budget and expenditure plans. They will need to consider all available options, in order to make an informed decision which is in the best interests of their school and which they can explain and justify to staff and parents. With so many interests at stake, they should also review the composition of the board to ensure they can make unconflicted decisions.

Staff will naturally be concerned about their pensions. If the governors decide they have to consider leaving the TPS, proper consultation will be required and the staff affected will need to consider taking financial advice. It is easy in such circumstances for relations to break down; it is therefore important that governors and senior management maintain proper dialogue with all staff.

Parents will be concerned about potential future fee increases and the impact on their children’s education of any economies made to cover the increase and the potential effect on staff morale. Again, regular communication is important to enable parents to make the right decisions.

For more information on the implications of the TPS, please see the blog post: ‘TPS (Teachers’ Pension Scheme) update – new school year, new consultation‘ and ‘Dealing with the challenges of the Teachers’ Pension Scheme – finding the calm corner among the crisis management and financial black holes‘.