Does this guidance relate to the Teachers’ Pension Scheme?
This guidance relates to workplace pension schemes rather than the Teachers’ Pension Scheme (TPS). Periods of employment as a supply teacher employed by or through supply agencies are not pensionable under the TPS, because supply agencies are not currently permitted to participate in the TPS. Supply teaching employment is only pensionable under the TPS when you are employed directly by a school, academy or local authority. The NEU is continuing to pursue this issue in order to secure equal access to the TPS for all teachers working in state funded schools.
What are workplace pension schemes?
Agencies are now required to offer access to workplace pension schemes to workers on their books. All agency workers between 22 and State Pension Age and earning over the “earnings threshold” of £10,000 should be ‘auto-enrolled’ into the workplace pension scheme.
The agency must pay a minimum pension contribution of 2 per cent of “qualifying earnings” (between £5,876 and £45,000 a year before tax - although all earnings can be regarded as qualifying earnings) while the teacher pays a minimum of 3 per cent. The employee contribution rate may vary depending on the type of tax relief applied by the scheme. If you are unsure, you should check your scheme documents.
The Government will also usually contribute to your workplace pension in the form of tax relief if you pay Income Tax and you pay into a workplace pension. Even if you do not pay Income Tax, you’ll still get an additional payment if your pension scheme uses ‘relief at source’.
What if I don’t meet the earnings threshold?
The agency is required to decide whether the teacher is likely to meet the earnings threshold before auto-enrolling the teacher in the scheme. The unpredictable nature of supply teaching can mean that teachers’ auto-enrolment can be postponed for up to three months if the agency believes that they will not meet the earnings threshold (this applies particularly to teachers who use a number of different agencies). Teachers may also end up with several workplace pension ‘pots’ depending on the number of agencies they use.
Any supply teacher can, however, still choose to join their employer’s workplace pension scheme even if their earnings are lower than the earnings threshold and they are not auto-enrolled. The teacher will be entitled to pay a contribution each month and, in any month when the teacher earns more than £503, the employer also has to pay a contribution. If the teacher’s earnings fall below £503 per month, the employer may stop paying contributions unless the rules of the pension scheme they have enrolled into require them to continue, or the employer has chosen to regard all earnings as “qualifying earnings”.
Do I need to keep all the paperwork from my workplace pensions?
You are strongly advised to retain all paperwork relating to your workplace pension(s) – e.g. letters, emails, statements, payslips and information about the scheme(s) into which you have been enrolled; and keep such evidence together in case of any queries or disputes which may arise in the future.