TPS: number of independent schools quitting scheme almost doubled since lockdown

The number of independent schools withdrawing from the Teachers’ Pension Scheme (TPS) has almost doubled in the last six months, a new freedom of information request has revealed.

The FOI request submitted to the Department for Education (DfE) by Wesleyan Financial Services confirmed that 98 independent schools in England have withdrawn from TPS since employer contributions rose by 40% in September 2019; 64 of those withdrawing have notified the DfE since the coronavirus outbreak in March.

The increase brings the total number of private schools withdrawing from the scheme to 177.

In response to a National Education Union FOI, the DfE confirmed in March 2019 there were 1,171 independent schools in England and Wales in the TPS; today’s figure, therefore, represents over 10% of the total independent sector membership of the scheme.

The financial pressures experienced by the sector following the coronavirus outbreak may have contributed to the increase in withdrawals.

Parminder Gill at Wesleyan said: “The number of independent schools opting to leave the Teachers’ Pension Scheme is rising at an alarming rate – putting thousands of teachers into less generous schemes.

“Although we saw an initial jump in the number of schools opting to leave the scheme following the rise in employer contributions last September, this has accelerated sharply as schools began to get a clearer picture of the long-term financial implications of meeting the additional costs.

Although we saw an initial jump in the number of schools opting to leave the scheme following the rise in employer contributions last September, this has accelerated sharply as schools began to get a clearer picture of the long-term financial implications of meeting the additional costs – Parminder Gill, Wesleyan

“With the events of the recent lockdown placing increased pressure on school budgets, many more schools are assessing their TPS options right now to see if they can afford to maintain their membership.”

Unprecedented strike action was called at some independent schools that notified teachers of their intention to quit the national pension scheme. In June 2019, teachers at St Edward’s School in Oxford went on strike over plans to withdraw from the scheme; the school is one of those 177 that will still leave the plan.

Julie Robinson, chief executive of the Independent Schools Council (ISC), last year said remaining in the TPS was ISC’s “first preference” for its members.

The government has confirmed that it will cover the increased employer contribution rates for state schools during 2019-2020, but private schools must raise funds themselves to meet the additional costs.

Related news: Independent schools ‘accelerating’ TPS exit talks

Neil Barton, head of business development, trustee solutions, at Broadstone, told IE in May: “What we’ve seen since lockdown is an increase in enquiries from independent schools that are thinking of exiting the Teachers’ Pension Scheme and need our assistance to do that.

“There were schools that were planning to launch consultations in September or early next year with a view to getting out of the TPS either early next year or September next year, but now they’re thinking of accelerating those processes because it’s just become more and more critical.

“They’re predicting their financial situation will become increasingly dire because of the reduction in income they’ll be suffering from because of the lockdown period.”

List of schools that have withdrawn from the TPS