DfE response to consultation on Teacher Pension Scheme (TPS) increase in Employers’ contributions
Thank you for all your support in providing responses to the DfE pension consultation exercise, 418 responses were submitted. That’s nearly 20% of total responses received to the consultation being from FE, which is helpful in getting our funding messages across to Government.
Further to my email to all principals of 18th January, I can now confirm that, following the DfE consultation on the funding to cover increased employer contributions to the Teachers’ Pension Scheme (TPS), the Government has today confirmed that it will be providing additional funding for colleges (SFCs and 16 to 19 academies) to support these increased costs in 2019 to 2020.
Funding beyond this period will be confirmed following the spending review. The following has been issued as part of Damian Hinds statement:
“Schools and colleges in England will receive an extra £940 million to ensure teachers’ pensions remain among the most generous in the country. Education Secretary Damian Hinds today (Wednesday 10 April) confirmed that the Department for Education will fully-fund increased pension contributions that state-funded schools and colleges will have to make in 2019/20, following a public consultation on funding changes set out in a review of public sector pension schemes that takes place every four years.
The Teachers’ Pension Scheme is one of only eight guaranteed by the Government; provides additional benefits linked to salary; is inflation-proof to offer teachers a secure retirement; and offers the typical teacher around £7,000 in employer contributions every year.
This makes the scheme one of the most generous schemes on offer – in comparison, Work Place Pension rules require private sector employers to pay a minimum 3% contribution to an employee’s pension, which is around £900 a year for someone earning the same salary as a typical teacher.
Employees, employers and the government all contribute to the scheme – and the Education Secretary Damian Hinds has today underlined his belief that it is important that the Teachers’ Pension Scheme continues to offer excellent benefits to attract talented teachers.
The consultation response also assessed the funding changes for independent schools and higher education institutions that participate in the scheme. State-funded schools and FE colleges were prioritised to be funded. Today’s announcement commits to fully-funding the increases for state-funded schools and colleges in 2019/20 – the end of the current Spending Review period. Beyond that, with the exception of the NHS, all Government funding will be decided as part of the next Spending Review.
The £940 million will be provided to FE colleges based on their individual TPS costs, and to schools on a per-pupil basis with an accompanying Supplementary Fund, as outlined in the accompanying pensions grant documents also published today. This confirms that any school facing a shortfall from the formula grant of more than 0.05% of its overall budget can claim extra money to ensure schools are properly protected.”
SFCA will of course provide further clarity on this issue once we work through the detail. In the meantime I attach links to the full consultation response and information on Teachers' pension scheme employer contribution grant: further education providers:
If you want to discuss any of this in more detail please contact Graham Baird, Director of HR Services.