News Heads told school pension contributions to rise by over 40% from 2019

Schools Week reporter

September 25, 2018

Headteachers have been told contributions schools pay towards teachers’ pensions are set to rise by more than 40 per cent.

An email sent to headteachers states the estimated contribution rate for schools under the Teachers’ Pension Scheme will rise to 23.6 per cent from September next year.

The current employer contribution rate is 16.48 per cent.

The huge hike follows a valuation of the public service pension schemes by the Treasury. It comes as headteachers are set to march on Downing Street this Friday over falling funding.

Heads were warned of the rise in an email sent by Employer Link, an employment guidance subscription service that is part of the Local Government Association.

The email stated the rise follows the government’s Actuary’s Department completing its calculations to provide indicative results of the 2016 valuation of the Teachers’ Pension Scheme.

As Schools Week previously reported, the Treasury has said the DfE will provide funding to help schools meet the expected additional costs during 2019-20 financial year.

Geoff Barton, general secretary of the Association of School and College Leaders, said schools will be “very concerned” about the potential impact.

“They cannot afford yet another unfunded cost on budgets which are already under severe pressure.

“We are reassured to an extent by the government’s intention to provide additional funding to schools and colleges in 2019/20 in respect of this extra cost.

“But we will be seeking assurances that this funding will cover in full the cost of the increased contribution rate.

“Schools and colleges face uncertainty beyond 2019/20 because we will not know the arrangements for future years until the comprehensive spending review has taken place next year. We will be making strong representations that the increased contribution rate must be fully funded beyond that date.”

Another head told Schools Week the rise was “outrageous”.

The email sent to heads stated the biggest impact on the contribution rate was a change to the SCAPE discount rate, which is used to assess the current cost of future benefit payments.

The Financial Times has previously reported the total of increased payments across the public sector could be as high as £4 billion.

The news of further budget squeezes will ramp up pressure on school leaders who are already making wide-ranging cuts with their government funding falling in real-terms.

A DfE spokesperson said they will “consult with the education sector on these proposals on the basis that the government will cover the extra costs involved for state-funded schools and colleges for the rest of the Spending Review.”