Proposed changes to contributions

The Department for Education has published a consultation on proposed amendments to the Teachers’ Pension Scheme regulations.

Periodical valuations of the Teachers’ Pension Scheme are conducted to ensure that it remains appropriately funded. The last one has identified that the projected yield for overall member contributions, based on the current structure, would be 9.45% for this valuation period. This is due to variance between pay and contribution tier increases over time. Work has been carried out with the Government Actuary’s Department and the Scheme Advisory Board to identify an appropriate adjustment that will achieve the required average yield of 9.6%.

The Scheme Advisory Board has recommended that the Scheme meets this shortfall in the required level of contributions by raising the contribution rate of all except those in the lowest earnings tier by 0.3 percentage points, with the bottom tier remaining unchanged to protect lower earners. This adjustment means that members continue to contribute an average of 9.6% - the overall rate isn’t being increased.

The draft regulations also update provisions on Fair Deal to include Further Education establishments. The Fair Deal provisions allow members who are in scope to retain access to the Teachers’ Pension Scheme if they transferred from a public sector employer to one in the private sector under Transfer of Undertakings (Protection of Employment) (TUPE) terms. HM Treasury has overall responsibility for public service pension scheme rules and is consulting on changes to the Fair Deal policy following reclassification of Further Education as public sector organisations by the ONS.

Please ensure your teams are aware of the proposed changes by reading the consultation (This link opens in a new window) and what it means for yourselves and members of the Teachers’ Pension Scheme.

We’ll provide further information once the consultation closes on 23 January.

Last Updated: 09/01/2025 15:06