The Department for Education (DfE) announced on 9 September 2019 that it is now consulting on a proposal to amend the Teachers' Pension Scheme (TPS) rules to enable independent schools to withdraw from the TPS on a phased basis. 

Under phased withdrawal schools will be able to opt out of the TPS in respect of new staff whilst allowing existing staff to remain as active members.

The consultation closes on 3 November 2019.

What Are the Main Proposals?

  • Whilst existing members of the TPS would be able to remain in the TPS, an alternative pension scheme would be available both to new starters and any existing staff who wish to opt out of the TPS.
  • New starters who had been active TPS members in their previous employment will not be able to join the TPS in their new employment if their new employer is adopting phased withdrawal.
  • Staff who opted out of the TPS prior to a school's decision to adopt phased withdrawal would be able to opt back in to the TPS with that employer at a later date.
  • Staff who opted out of the TPS after a school's decision to adopt phased withdrawal would not be able to opt back in to the TPS with that employer at a later date.
  • Schools who decide to adopt phased withdrawal would be able to return to the TPS on a full basis at a later date but would need to enroll all eligible staff.

Why Is the DfE Consulting?

The aim of the proposal is to mitigate the costs of the increases in the employer's contribution to the TPS effective from 1 September 2019, whilst protecting the benefits of existing staff.

The specific questions that the consultation seeks to answer are:

  • Would phased withdrawal help with mitigating costs?
  • Would phased withdrawal protect existing staff?
  • Are there any alternatives to mitigate the financial pressures upon schools?