In November 2020, the Department for Education (DfE) published its long awaited response to the consultation on phased withdrawal (also known as “Mixed Economy”) from the Teachers’ Pension Scheme (TPS).
At a high level, phased withdrawal allows an independent school to retain TPS for existing teaching staff but to provide alternative pension arrangements for new teaching hires. The consultation response indicates that regulations will be introduced so phased withdrawal is available for independent schools from spring 2021.
On a not unconnected note, from the wider perspective of all the stakeholders and participants of the TPS there will be some concerns as to whether phased withdrawal will serve to dilute the scheme more generally. This covers the wider position of TPS if active membership decreases and also its place as a benefit to the teaching profession. These are key risks and it will be interesting to see how these are addressed by TPS going forward.
In this briefing note, we explore what the phased withdrawal option might mean for independent schools, noting that there will be further detail to digest on this option in due course.