How to keep pensions on your school’s new year resolution list

By Caroline Gaines, Principal Partner

How to keep pensions on your school’s new year resolution list.

By this time in January, most of us have either broken, dropped or conveniently forgotten about what they resolve to do in 2025.

But for many independent schools  the cost challenge posed by the Teachers’ Pension Scheme (TPS) or its Scottish equivalent, is  not something they have the luxury of putting to one side.

Even as schools deal with VAT on fees, higher national insurance contributions, the increase in minimum wage and a hike in business rates, the current  – and future – cost of the pension they offer staff remains a pressing priority.

And the reason we raise it at this early stage of the year is because time is of the essence. In short, if you need to address your pension costs this isn’t something that  can be put off and its certainly not something that can be dealt with quickly.

We have worked with dozens of schools on every aspect of not only reviewing the TPS against alternatives but also what comes next.

For those institutions who have left TPS and put in place an alternative arrangement, it’s the beginning of a new era and what can be new territory to navigate.

But what’s new for your school is familiar to us because we have helped to tackle the same issues for other schools over the years. Here are just some of the issues with which we’ve helped private schools.

 

Acting to save your school?

Choosing the right pension scheme for your school is a key consideration. We have consulted with institutions which are in the difficult position of having to scale back their activities or even face closure unless timely action can be taken. It is stressful and you need seasoned counsel on your side.

 

Post-TPS: what to do next?

Understandably, the main focus for many schools is reviewing TPS and what an alternative would look like; a critical undertaking. But what can be overlooked is what to do once an alternative workplace pension scheme is in place. We continue to work with clients to manage this transition to business as usual. There’s still much to do to make sure every staff member is able to make the most of this change.

 

Salary sacrifice to support pay and pensions

Another aspect often underappreciated is how an alternative pension can open up further cost-savings  through salary sacrifice which can help independent schools meet the challenge of providing  both competitive pay and benefits for all teaching and support staff.

 

Other potential benefits?

Potentially reducing pension scheme costs can open up new possibilities for all staff to access an enhanced overall benefits package. Many of our clients have been able to offer a range of other  benefits, including health cover, as a result of reducing pension scheme costs which can be prioritised by employees.

Any consultation will always involve many moving parts and our approach means they can all be considered as part of the overall objective of the exercise.

As a process, it may be unwelcome but absolutely necessary. At Secondsight, our team takes a constructive stance to something often viewed as inherently negative and, we believe, this mindset is a vital component to an effective, conclusive consultation.