Proposed increases in the employer contribution to the Teachers' Pension Scheme (TPS) could lead to some employers withdrawing from the scheme, with members taking a significant hit to their pension.
First steps to protect your pension:
- Demand full financial disclosure & interrogate the detail.
- Challenge consultation that is not meaningful.
"Meaningful staff consultation" is not:
giving a week’s notice;
proposing an alternative scheme without full detail;
not disclosing full school finances;
threatening to sack staff;
saying decision already made.
- Organise collectively to oppose unacceptable proposals or retain your right to TPS membership.
- Exhaust all options, before considering accepting alternative schemes.
Use the following materials to assist members:
Independent Schools proposing to leave the Teachers’ Pension Scheme – frequently asked questions.
An illustrative comparison of likely loss if members are moved to inferior pensions schemes away from TPS.
NEU model letter for Independent school teachers to send to Governors, opposing withdrawal from the TPS
Model letter for independent teachers seeking meaningful consultation on TPS with governors.
NEU members successfully challenge proposals to leave the TPS
As the number of employers proposing to leave the TPS increase, so does the number of successful NEU campaigns to stay!
NEU members have successfully challenged proposals to leave the TPS, in workplaces ranging in size from small preps to large HMC schools. Some school governors have sympathetically listened to and by been persuaded by staff argument. In others, they have made pragmatic decisions in the face of threatened or actual NEU industrial action.
Of course, the task is easier if you act fast and nip it in the bud. However, it is never too late!
In one Suffolk school, our members won a victory at the 11th hour. Things were so advanced that their employer had issued a Section 188 letter detailing dismissal and re-engagement and informed the parents that the school would withdraw from TPS. Supported by NEU Regional officials, members got organised by electing two NEU reps, who then led on staff suggestions on alternative cost savings. Members made clear the strength of feeling that staff would take industrial action to preserve their pensions. After negotiation, the employer agreed to withdraw the proposals.
Many successes were shared by reps at the NEU Independent School Conference in November 2019. You can read a report on a recent success story by our rep at the Royal Russell School here.
TPS membership – the numbers
In response to a NEU Freedom of Information Request, the Department of Education has stated that as at 31 March 2019, there were 1,171 independent schools in England & Wales in the TPS.
In response to a NEU Freedom of Information Request, the Department of Education has stated that as of 19 November 2019, 97 Independent schools have applied to leave the scheme. We have been informally told that, as of December, this figure now stands at 102.
This is less than 10% of total. It puts the lie to an employer arguing that they are leaving because all the other schools are. Further, with more than 90% of schools remaining in the scheme for at least a year gives substance to the argument that the school can afford the increase.
Notwithstanding this, clearly, there are schools that genuinely cannot afford it. Though, it would not be unreasonable to think that schools in that position would leave at the first opportunity after the increase took effect in September 2019.
That said, we anticipate that numbers consulting on leaving are likely to increase this year. Many employers stated that they were adopting “a wait and see” policy in the first year. Employers are fearful of jumping the wrong side of the line on a key issue in recruiting and retaining teachers.
Major employers reassure staff that they are staying with the TPS
Many major employers, such as the Girls’ Day School Trust, are remaining in the TPS. GDST staff have a strong collective voice, as NEU is the recognized union.
Successful NEU representations strengthen school resolve. NEU school reps across the country are reporting that robust NEU members’ representations have made a difference. Many governing bodies, sympathetic to staff interest and their ability to recruit and retain quality teachers have issued statements to reassure staff.
Threat of union action. In some instances, where members believe that the option to remain in the TPS is being unreasonably discounted, members have conducted indicative ballots, prior to industrial action. One school in the SW, saw 70% support for action, forcing the employer to rethink and commit to staying in the TPS!
A bad situation worse. It is indisputable that any alternative scheme will not offer comparable benefits to the TPS. Unfortunately, a few employers are making a bad situation worse by proposing to decrease the employer contribution from the current level of 16.4 per cent. Check the proposed employer contribution for any new proposed scheme is no lower than that for the TPS now.
Currently, Pensions Regulations require that an independent school employer who is a member of the TPS must offer it to all eligible staff. This means that it cannot close the scheme to new entrants.
Some employers lobbied the government to change the regulations. In response, the Government undertook a consultation on allowing independent schools to close the TPS to new entrants which formally closed on 3 November 2019. This is the so called “mixed economy” or “phased withdrawal”. The outcome of the consultation is yet to be announced, having been delayed by the General election.
The NEU position is opposed to changing the regulations for two main reasons.
First, as a matter of principle, we believe that all teachers have the right to a good pension, the TPS. Indeed, the one big victory of the ATL & NUT alliance in the 2011 TPS Campaign, was preventing the Coalition Government of seeing through their plan to boot independent schoolteachers out of the TPS altogether. We know from the private sector that firms closed their defined benefit pension schemes to save money. Pensions for new staff were lower as a result.
Second, our objection is pragmatic. We believe that removing the main opposition to leaving - staff opposition - will encourage more employers to do so. We know that many employers have not proposed leaving the TPS for fear of staff reaction. Indeed, there are numerous examples of employer making the initial proposal but retreating in the face of organised NEU opposition.
For local on-going support - contact your local NEU regional office.
Self-serving employer argument
NEU school reps are reporting that some employers are using a variety of unsubstantiated argument to justify leaving the TPS. Amongst other things, these include: the TPS will collapse in two years: employer contribution increasing further: we have to leave now before exit fees are introduced; all our competitors are leaving.
All of this is wild speculation and not based in any fact. There is no evidence that the scheme will collapse. There are no exit fees at the moment and no proposals to introduce them. There is no proposed further increase in contributions.
Such speculation takes us into the realms of commenting on possible future proposals, the shape of which we don't know because they don't exist.
Any changes caused by the next valuation of the scheme will take place in 2023. Any changes that are made then should be addressed then.
Warning: Legal Cases on Pensions Protection
Following the successful legal challenge by Firefighters and Judges to the changes to the Teachers’ Pension Scheme implemented in 2015, some law firms are asking teachers to sign up to “no win no fee” employment tribunal cases.
The NEU advises members that there is no need for them to sign up to such cases.
The Government has already confirmed that members of the Teachers' Pension Scheme will be compensated on the same basis as the litigants in the cases already decided in respect of judges and firefighters.
These law firms are asking members to pay as much as £1,800 (£1500 plus VAT) in legal fees, to be paid from compensation which the Government has already said will be payable. The compensation payable to some members of the Teachers’ Pension Scheme may be less than the legal fees being quoted, and some members may actually have gained from the changes.
The NEU believes that these law firms’ actions are wholly unnecessary and inappropriate. If the position changes then members will be informed.
You can read more about the Court of Appeal ruling in the Judges’ and firefighters’ age discrimination pension case.
For individual personal financial advice, NEU members can seek free, no obligation initial consultation from Lighthouse, either on a 1-2-1 basis or through a school member meeting.
What you can do
There is a potential significant detrimental for you, future generations of teachers, your school and ultimately the pupils.
There are things that you can do now which might positively influence the situation in your workplace.
- Get together with your fellow NEU members to make sure that colleagues are aware of the threat and to form your collective response. The NEU is by far and away the largest education union and in the independent sector. A union response in an individual school comes with that additional heft.
- This should be led by the NEU workplace rep. If there isn’t one in your workplace, now is the time for members to get organised and appoint a rep! Information on the role can be found here.
- Speak to your bursar to find out what the situation is your school or college.
- The institution’s resources might mean that they can absorb the additional cost without issue. If so, you don’t need to worry.
- If there is any doubt about continuation in the scheme you need to act as soon as possible.
- It is imperative that NEU members make robust representations to the governing body or proprietor to stress the importance of the TPS to staff and the school.
- As the largest and most influential union in the independent sector, we recommend that this is done in the name of the NEU. As appropriate, you might act in liaison with other unions, the common room, or staff pay and remuneration committee.
- If your employer is actively considering withdrawing from the TPS, then they must make provision for meaningful consultation of staff. Ask what provision is being made.
- The strongest staff voice is where the employer recognises the union to collectively represent staff. Then there is negotiation, with a view to reaching agreement.
- If the NEU is not recognised in your workplace consider seeking recognition of NEU – a statutory right, with majority of staff support.
- Should your representations prove unsuccessful, there should be a negotiation on provision for an alternative pension scheme.
- NEU reps have already reported their employers citing the pension increase as an inhibiting factor on staff pay rises for September 2019. Should your employer make such claims, NEU recommends that members seek full disclosure of all relevant financial information. This is a statutory right under recognition and the ACAS guidance on disclosure of information can be read here.