Salary bands for Teachers’ Pension Scheme Employee Contributions April 2024
From 1 April 2024 the contribution bands for employee pension contributions to the Teachers’ Pension Scheme are rising by 6.7 per cent. This is in line with the September 2023 increase in the Consumer Prices Index (CPI).
This increase only affects the contribution bands. The contribution rates remain the same. The contribution structure is based on the teacher’s actual salary rather than the full-time equivalent salary.
The tiered contribution rates for the TPS from 1 April 2024 are as follows:
| Annual Salary (1 April 2023 – 31 March 2024) | Annual Salary (1 April 2024 – 31 March 2025) | Member Contribution Rate (%) |
| Up to £32,135 | Up to £34,289 | 7.4 |
| £32,136 - £43,259 | £34,290 - £46,158 | 8.6 |
| £43,260 - £51,292 | £46,159 - £54,729 | 9.6 |
| £51,293 - £67,979 | £54,730 - £72,534 | 10.2 |
| £67,980 - £91,697 | £72,535 - £98,908 | 11.3 |
| £91,698+ | £98,909+ | 11.7 |
Indexation of TPS Career Average Pensions April 2024
The Government has confirmed that career average pension rights for members in teaching were increased by 8.3 per cent in April 2024. Members with deferred pensions will have their career average pension rights increased by 6.7 per cent.
All teachers in active service are now accruing pension in the career average section of the Teachers’ Pension Scheme. Their pension is being built up at 1/57 of their pensionable earnings each year. These pension rights are then increased each year until retirement at CPI inflation + 1.6 per cent for teachers who stay in teaching, and at CPI inflation only for those who leave the Teachers’ Pension Scheme.
The increase is based on the CPI figure from September 2023, which was 6.7 per cent.
Teachers’ Pension increase 2024
The April 2024 increase for TPS pensions in payment has been confirmed as 6.7 per cent, in line with the September 2023 increase in the CPI.
Teachers’ Pension Scheme Age Discrimination Cases (McCloud) - summary
Transitional protections meant older members of the TPS remained in the Final Salary Scheme or delayed joining the Career Average Revalued Earnings (CARE) scheme whereas younger members were immediately transferred into the CARE Scheme as soon as it was implemented in April 2015. The Courts determined in the ‘McCloud’ judgement that this was discriminatory against younger members and ordered the government to rectify the situation.
Eligible scheme members will choose between final salary or career average scheme benefits for the period 2015 to 2022 when they take benefits from the scheme – effectively getting the better of the two schemes. The choice will for most people be made at the point of retirement. Members can find out whether they are affected through a handy decision tree on the Teachers’ Pension Scheme website.
Compensation arrangements for members in the Local Government Pension Scheme will be slightly different. All LGPS members joined the career average scheme in 2014, but some older members had the benefit of a final salary ‘underpin’ meaning they would not get less than they would have received if they’d stayed in the previous final salary scheme. This underpin will now be extended to all members until 31 March 2022.
Members who have taken retirement benefits before 1 October 2023 will be provided with their choice as soon as practicable after 1 October 2023. There is nothing which members can do proactively to speed the process up. If you are affected you will be contacted in due course.
McCloud – Remediable Service Statements
Retired members and others who have taken benefits from the TPS will soon be in a position to make a choice on final salary or career average benefits for the April 2015 to March 2022 period.
The Public Service Pensions and Judicial Offices Act 2022 provides that members should receive a ‘Remediable Service Statement’ (RSS) within 18 months of 1 October 2023. The RSS will include details of remedy period benefits calculated under final salary and career average rules to allow members to make an informed choice.
Active members must subsequently receive an RSS every year annually. Deferred members can request an RSS each year. When members apply for retirement benefits, they will receive an RSS which includes their final benefit calculations. They will have 12 months from the RSS to make a choice. If no choice is made then the pension cannot be processed. A member can change their choice at any point before their application for retirement benefits has been processed.
Eligible retired members will be provided with an RSS within 18 months of 1 October 2023 and will then have 12 months from the date of issue to confirm their decision between final salary and career average benefits for the 1 April 2015 to 31 March 2022 period. If they do not make a decision the regulations allow the scheme manager to ‘deem’ an election for career average benefits if that would have a higher monetary value, otherwise final salary benefits will be paid.
McCloud - Transfers
Members usually have 12 months to move funds from other pension schemes into the TPS. The movement of tapered (who had some transitional protection) and unprotected (who were moved into the career average scheme on 1 April 2015) members back into career average from 1 April 2022 restarts the clock for transfers. As legislation was not brought into place until 1 October 2023, the 12-month clock runs from that date until 30 September 2024. Members seeking to transfer other pension funds into the TPS should seek independent financial advice.
Impact of pay freezes re ‘best consecutive 3 in 10’ salary calculation
The NEU is continuing its efforts over the issue with the ‘best consecutive 3 in 10’ average salary calculation in the TPS final salary pension scheme.
The calculation method for the ‘best consecutive three years in ten’ average salary only applies revaluation if the salary rate changes. This means a pay freeze leads to no revaluation of pension and consequent losses for members if they retire during a period of pay freeze when indexation would otherwise be positive.
The issue re the pay freeze in 2021-22 should now have been sorted out assuming teachers have had a pay rise since. However, the way the regulations are drafted means future pay freezes would mean no revaluation of pensions.
Following discussions, the DfE determined that it should consult on a proposed change to the average salary rules involving indexation happening once a year to all members, not as currently when salary changes. Any change would only apply from whenever new regulations came into force, and would not apply retrospectively. This was not ideal but certainly would be an improvement on the current position.
It was therefore with considerable disappointment that the NEU and other unions have been informed that the Treasury had refused approval for the DfE’s proposal, essentially because changes to public service legacy scheme Regulations would not be approved as a matter of Treasury policy.
There are approximately 12,000 employers in the TPS and NEU is prepared to campaign, employer by employer, to ensure that every TPS member has an annual pay event should a future pay freeze occur.
Check your pension records
The NEU receives many reports of pension records being incorrect. The growing fragmentation of the school system means a growing number of small employers, and more changes of employer for teachers over their careers. These are perfect conditions for mistakes to be made.
Members should sign up with the Teachers’ Pension Scheme’s ‘MyPensionOnline’ service to check that their pension is correct. Teachers can register here and will need their national insurance number and an email address.
All members should check their salary details and that their contract and days out of service are correct. It is much simpler to deal with errors as they arise rather than shortly before retirement. It is therefore important to keep payslips and other salary records (like P60s).
The NEU recommends that you check your pension records and pension data at least once a term. You should raise any issues with your pension records immediately with Teachers’ Pensions.
