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?

OP, I moved back to the state sector partly for this reason after 5 years in an independent. I'm over 50, UPS3, was not prepared to work more than 0.8 and two schools snapped my hand off. Seriously, there are gigantic shortages out there.

And no state schools will not come out of TPS, short of the kind of social and political convulsion that will mean (frankly) pensions will be the last of our worries.

Do find a school with decent behaviour management and a non megalomaniac SLT though.

Teachers are teachers! Good, bad and indifferent in both sectors.

You might have to take industrial action.
Some schools allow existing staff to remain in the scheme
Some let existing staff remain but the staff member has to pay for any increase in employer contributions going forward
The pensions they replace it with vary hugely. But most are very good with high employer contributions, just not as good as tps.

You then need to decide if the rest of the employment package compensates in that for you or not.

Of course, you can’t generalise and there’s good teachers and bad teachers everywhere. But I wouldn’t automatically presume that private a better, not in 1 million years.

Some schools are consulting about staying in but not agreeing to the latest increase in employer contribution, up to 28%

@androidnotapple but what would the alternative be if they don’t pay the full employer contribution (28.6%)?

I work in an independent without TPS. Our pension is shockingly awful. Because my husband works in a well paid sector I can afford to massively over contribute to my pension (overpayments are deducted before tax). But we’re mid 50s and focusing on retirement and working out ways to maximise the pretty rubbish deal.
I stay there because in lots of respects it’s a lower stress job (different type of stress) than a much larger state school. But am aware that I’m privileged to be able to afford to work there.

Did you challenge it when it changed @SunnySomer ?

And can I ask who your pension is with (if you don’t mind sharing)?

If TPS is withdrawn from the state sector, there will be no reason at all for all the teachers who are hanging on by their fingernails, to stay. The shortage of teachers even now is desperately worrying. Removing TPS would be catastrophic.

Ah. Sorry - it didn’t change. I joined the school as an ECT, assumed it would have TPS as the head at interview said something along the lines of “We have a great pension, we meet all our obligations,”.
Then discovered after I’d started that what he meant was the school meets its minimum legal obligations. Until I trained to teach I’d always had public sector jobs so was used to a good pension and not actually thinking about it; to be honest I was really stupid and didn’t read the small print until after I started the job here.
So, there was nothing to challenge. I’ve looked vaguely at better ways of investing, but as this is deducted pre-tax, it’s cost-effective.
I have previously been in public sector schemes that changed as they became unaffordable to the organisation, and there were clear rules about pre-change contributions and post-change contributions- in your position I’d want to be clear that your contributions to date will be paid from TPS and not carried over to the new scheme.

Your posts imply you’re well into your career. There is no realistic prospect of the state sector wholesale withdrawing from TPS in your remaining working life. If you can hack working in a state school I’d leave, if the alternative is the same salary and a DC instead of DB pension.

Not true. They didn't back down, and have left the TPS.

The problem is the pension contributions are crippling to independent schools who aren't super wealthy, and if they carry on the company could fold and then you have no job.

I can’t see how the private sector can afford to stay in, especially with the anticipated increases. 24% is already high but predicted to go up further.

As private schools pull out the amount going into TPS decreases and so the % will go up for everyone to make the numbers work. When this happens I think academies will start to pull out too. It will be gradual but I really can’t see how it can keep going.

We worked with the school when we pulled out and got a good deal, with an employer contribution of 20% and death in service, medical retirement etc… Set up a good working party and use the negotiation to maximise what you can get.

One school I know stayed in TPS but accepted a pay cut to do so, but not sure what will happen is the contributions continue to rise.

My understanding is that the school has to make a business case for a contractual change. If there is the kind of business case you describe (as in, they would have to close if they didn’t), then the union wouldn’t let you take industrial action.

But this won’t be the case for every school. I agree with @Araminta1003 that one needs to understand the company’s finances, and then negotiate.

My question on negotiation is—how do you get your school to negotiate with you and what are you negotiating for?

Colleagues in other schools that have already withdrawn have got terrible deals, and are expecting to be more than £100 000 down on what they would have got in the TPS. Some have performed so badly that they now have less than what they have invested.

I don't know how it works at all, is the part of your pension in the TPS protected and remains in the TPS? Like the teachers who have left teaching but the pension remains?
Or does it all come out?
If the latter, I'd look at hacking it in state (or even another job) and take the pension when you need it.

@Hercisback That’s a really good question.

I think the TPS part of your pension is protected and remains in the TPS, even if your employer withdraws.

Unless anyone else knows differently…?

Err 🤔

Your accrued contributions stay in TPS. I'm now in my second independent going through the withdrawal process. The bursar is of the opinion that very few independents will be left in the TPS after this next increase. At least, those that have not already done so, will start the process of consultation with staff.
Very few staff will leave, I think. In my opinion it's just a different job to state. I don't think I could go back now.

I don't know. Recent letter from the governors saying they are consulting not on leaving the TPS but capping the employer contribution - I assume at current level

Everyone on an unfunded scheme such as TPS should be aware that ultimately you are not paying into "your" pension but paying the pensions of the current retired teachers. So you are relying on future contributions from future teachers to pay your pension. Most of these pensions are utterly unprepared for people living longer and so basically there's a massive pensions crisis that will hit governments. Personally Id prefer something that actually reflected "my" contributions than relying on future governments to do the right thing

This just isn’t true where I work. I’ve now taught in two independent preps in the south of England who have withdrawn from TPS and not one member of staff left over it, and we still have soooo many applicants for every teaching job. The salaries are around the same as state (or slightly lower for some) but they’re very attractive places to work despite that.

It may not be true where you work but as a governor of an independent for many years lack of TPS was an issue when recruiting.

Hope you didn’t mean to imply that private school teachers are often better than state school teachers? In what sense might teachers with private school experience be better at teaching in state schools? The qualified ones in both types of school have the same qualification.

@nibblessquibbles I think you're absolutely correct in that advice for a younger teacher (although we probably have another financial crisis coming and it's never sensible to have all your eggs in one basket) but the OP is, I think, nearer my age (50s) and as a pp said, the TPS is unlikely to get canned or collapse in a decade or so.

The DB schemes often mean the younger teacher gets to "keep" more of their salary which may help e.g. with getting on the housing ladder.

I would say I thought the same as you before I looked into the difference between DC and DB schemes in detail.

OP, get a free appointment with Wesleyan to talk it over.