Royal London: Independent schools opting out of Teachers Pension Scheme

11 November 2019

Royal London publishes on its website:

“With more than sixty independent schools having notified the Government of their intention to withdraw from the Teachers Pension Scheme by July 2019, attention is now turning to the alternative provision which schools are putting in place.

Governors who have never before had to make decisions about pension provision for teachers in their school are now responsible for choosing alternative arrangements. But concerns have been expressed by schools and advisers that not all governors are ‘shopping around’ for the best scheme, and not all are seeking expert financial advice to help them judge between different pension arrangements, including potentially offering a ‘hybrid’ arrangement where some teachers remain in the TPS.

Like many independent schools, Taunton School in Somerset has responded to the increase in employer pension contributions by reviewing its pension arrangements. Having taken financial advice, it has set up a ‘hybrid’ arrangement which allows staff to stay in the TPS if they are prepared to fund the increased contributions, or to opt out and receive a package of similar value payable into a private pension. Having looked at the range of options, Taunton School opted to use mutual insurer Royal London as their pension provider.

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