A \u201cconsiderable reduction\u201d to the amount schools contribute to teachers\u2019 pensions is \u201chighly likely\u201d following a revaluation of the scheme, a minister has revealed.<\/p>\n
But teachers\u2019 contributions and pension pots are not expected to be affected by the change.<\/p>\n
Schools currently pay a fee equivalent to 28.6 per cent of teachers\u2019 wages every year into the teachers\u2019 pension scheme.<\/p>\n
But speaking in the House of Lords yesterday<\/a>, skills minister Jacqui Smith said the rate is expected to drop significantly amid a review of the amounts paid into public sector schemes.<\/p>\n \u201c[Rates] have gone from 16.48 per cent in 2019 to the current 28.6 per cent,\u201d she said.<\/p>\n \u201cIt is highly likely\u2026 that there will be a considerable reduction in the average employer contribution rate as a result of that revaluation.\u201d<\/p>\n Any change would come into effect next April and would remain in place for four years.<\/p>\n \u00a312bn lower<\/p>\n Smith noted that the government actuary\u2019s department has written to the Treasury stating the \u201caverage employer contribution rate across the unfunded public service pension schemes, of which the TPS is one, is expected to fall significantly\u201d.<\/p>\n Across the schemes \u201ccontributions are expected to be over \u00a312 billion lower in 2027-28 than in 2026-27\u201d.<\/p>\n The expected reduction is due to an increase in the SCAPE discount rate, a government assumption used to calculate the value of future pension benefits.<\/p>\n Employee contribution rates of 9.6 per cent on average will not be affected by the change. Pension pots will not be impacted either.<\/p>\n News of the anticipated savings schools will make from the reduced payments comes as the sector waits for the government\u2019s decision on teacher pay<\/a> from September.<\/p>\n