Pensions in private schools: TPS withdrawal

[Elthamjohn]

Has anyone gone through this? I am really worried that my school might be about to leave the TPS, and I just don’t know where to begin…

Would they offer an alternative? What have other schools done? How do you understand what a good deal is compared to the TPS?

I was hoping to hear of how it happened for others in the independent sector. Did you take legal advice? Do you use the school’s pension adviser or get an independent one?

I'm in my second school now which is going through the process of withdrawing. It's a miserable experience and undoubtedly affects staff morale.

The school must offer an alternative pension. In both instances, the new pension offered has been competitive when compared to other pensions in the private sector (i.e. non schools private sector) in terms of employers' contributions but nothing they can offer will be as good as the TPS for the vast majority of staff. A private pension will be defined contribution (which means you take on the risk of its performance ultimately) whereas the TPS is defined benefit so you always know what you should get out at the end of the day. TPS also offers death in service and sickness benefits. In my school, salaries are just about commensurate with state schools so the TPS withdrawal (and less sick pay, maternity pay etc) makes the overall remuneration less competitive than the state sector now.

The school may offer you a session with a pension adviser but don't forget that they can't give you individualised advice (and they are being paid for by the school).

Thanks @Fayrazzled . That is really clear. Pensions are so difficult to understand.

Is there any way that you can just say, ‘no’?

Gosh. I’m state sector and adverse to change, but I genuinely think I’d have to leave the school. If enough staff did, that would be the only way they’d learn.

I think there are schools that have taken industrial action @LividHol .

But I agree with @Fayrazzled that TPS withdrawal must destroy morale. It certainly doesn’t make the profession as attractive.

The TPS is one of the best pensions out there, employers contribute almost 24% & defined benefit! You need to add up everything & see if it’s worth it, maybe look at moving.

I agree @grottyb . But once you are my age / years of experience, it is really hard to get into the state sector.

The employer contribution will massively increase in April 2024, too. The government will fund the increase for the maintained sector (for now), but not for private schools.

I wouldn’t give up though!

The state sector needs more teachers. I would start planning your exit from the school. They will find it v difficult to recruit if they withdraw from TPS unless the salaries are higher.

My friend was in this position. Her school came out. The school fid psy for free advice. She had to find a separate pension. It stressful I know

Loads of our staff left went to the state sector. That includes me.

They did offer us a good pension, but it wasn't as good. We earned slightly less than the state sector as well, so we just left.

But will the state sector keep the tps for much longer?

Transferring from private to state might not be that smooth- can be more chalenging than perhaps what you might be used to in.private. . I know my friend has a higher salary in her private school.

DH and I are in early 40s. He works in Independent, I in state. I'm not convinced either of us will have our TPS pension right to the end. Not in its current form anyway, it's becoming too onerous for all schools.

But will the state sector keep the tps for much longer?

I think so, unless there’s a major shift with all public sectors pensions. That’s not a small feat!

I am in the same situation. I think if you are 20 years in to the TPS, and have so long to go until retirement (with quite limited options to move), then you have a great deal to lose by moving to a DC scheme. Someone at the very beginning or very end of their career might not take such a financial hit.

But it is so hard to get your head round.

The TPS has been the most attractive part of the remuneration package of being a teacher.

What subject are you. There's loads of jobs in state sector. The GDST (I think) schools tried to leave TPS and there was massive industrial action and they had to back down

I’m a core subject. I have worked a lot of my career in the maintained sector, so it is an option (except that I would be UP3 and I imagine those aren’t that desirable).

I do wonder about the TPS and academies, though.

Has anyone seen the most recent TPS valuation? I don’t think the government will fund the increase indefinitely.

Good news that state schools will be getting more and hopefully better teachers!

Those schools which have left don't seem to report a major recruitment or retention issue.

TPS is a big pyramid scheme - current contributions pay for pensions in payment. Inflation, life expectancy etc mean that the costs keep in rising. In the end employee contritions will need to go up or benefits reduce. It's also really inflexible - with a dc scheme employees can vary their contributions depending on their needs at the time.

My school went through this. Only one teacher actually left for the state sector in the end despite many saying they would leave!

Hilarious that you think they will be better

@FizzyLaser Haha, so you think private school teachers are not as good as state?

I saw lots of striking staff with banners at a local GDST school a few years ago because of TPS. People gossiped that a compromise was reached in the end and existing staff stayed in the scheme somehow, but new staff joining did not (note this is anecdotal).
Despite that I personally know 2 teachers who left two local schools to join this GDST school for work/life balance reasons. Things like being able to take time out more often for family health issues kind of thing. Both have said they are more supported in the private sector by management. I guess that depends on the individual situation. GDST is known for trying to keep costs as low as possible for parents.

OP have you gone through your school’s accounts in detail and is there a big pensions deficit in the millions? With this Vat on school fees business I suspect loads of private schools will leave TPS just to survive and some over keen management are already addressing the anticipated financial situation rather over zealously. So it is going to cost the government up to 15 per cent more to fund TPS if all the private schools go. In the short term with the teacher recruitment crisis I think Government will just have to fund TPS.
I wonder if it is the uncertainty bothering private schools and whether better salaries in the private sector will become the norm to compensate. So I would negotiate hard.