Case study – How one-to-one sessions helped a private school switch pensions

When contributions to TPS began to rise significantly from 2019, the governors feared spiralling costs driven by the prospect of the school’s contribution to the TPS continuing to spike. While they were happy to pay a generous rate, they wanted to cap this at 22 per cent.

The governors were seeking a sustainable way forward to provide a pension suitable for both teachers and support colleagues, as well as maintaining the school’s sound financial footing.

We ran a three-month consultation, complete with one-to-one personalised sessions with teachers, detailing the contrast between TPS and an alternative pension scheme. We also built in further time for them to digest the proposal.

Support colleagues were able to remain in their group pension plan, which was taken under the wing of Aviva’s “umbrella” pension scheme for independent schools under the same terms, meaning minimal disruption. This meant everyone was now part of the same scheme, albeit with different contribution levels.

As a result of this exercise, the school realised it did not need to raise fees and were also able to offer life assurance and income protection as part of the new benefits package.

And because salary sacrifice meant lower National Insurance contributions for both employer and employee, the school was able to pay the difference into the staff pension.

Nine out of ten staff initially voted for a workplace scheme to replace TPS before it was eventually unanimous. This meant teachers were able to benefit from generous school contributions – now at 22 per cent – enabled by salary sacrifice and cost control elsewhere.

With all staff in one scheme, their retirement outcome is far more transparent for both them and the school to monitor.

We continue to help the school look after the ongoing governance, reviewing fund performance, staff numbers, scheme demographics, ongoing staff communication and financial education and health and risk benefits.

The school was able to hit its target of capping contributions up to 22 per cent for teachers, whose personal contributions are between just two and six per cent. Currently, schools in England, Wales and Northern Ireland remaining in the TPS pay 28.7 per cent. In Scotland, the school contribution rate is 26 per cent.