Leaving the Teachers’ Pension Scheme

Many colleges and academies are reassessing whether continued participation in the Teachers’ Pension Scheme (TPS) remains financially sustainable. Falling pupil numbers and wider cost pressures, including the impact of VAT on school fees, mean TPS contributions can place significant strain on budgets.

Leaving the TPS is a major legal, financial and employee‑relations decision. We help schools navigate the process with clarity and confidence, ensuring compliance, reducing legal risk and supporting positive engagement with staff at every stage.

Key legal considerations when leaving the TPS

Leaving the scheme is legally permissible for independent schools, but the process must be handled carefully. You will need to:

• Consult with staff and trade unions where appropriate, following the required formal processes and timelines
• Manage potential contract changes, as alterations to pension arrangements may require employee agreement and updated terms of employment
• Provide an alternative qualifying pension scheme that meets UK auto‑enrolment minimum standards
• Consider long‑term employee relations, recognising the potential impact on staff morale, recruitment and retention.

Your options for leaving the TPS

Schools typically choose one of three models when exiting the scheme:

1. Phased withdrawal

Existing members remain in the TPS, while new joiners are enrolled into a defined contribution scheme.

This softens the impact for current staff but risks creating a two‑tier workforce over time and may affect recruitment competitiveness.

2. Full scheme withdrawal

The school leaves the TPS entirely and moves all staff onto an alternative pension scheme.

A straightforward option from an operational perspective, but one that requires careful consultation, legal risk management and thoughtful communication.

3. Cost‑sharing arrangement

Teachers agree to fund the increase in employer TPS contributions from their own salary.

This allows continued TPS accrual but comes at a cost to individuals; schools must handle negotiations and consultation with particular sensitivity.

How can we support you?

Our multidisciplinary team of employment, education and pensions experts provides end‑to‑end guidance, ensuring your school’s approach is legally compliant, commercially sound and clearly communicated.

• Strategic assessment: We review your current provision, financial pressures and staff profile to help you determine whether remaining in the TPS, partially withdrawing or leaving entirely is the right fit for your school
• Pension scheme design: If you decide to exit, we support you in selecting and implementing an alternative pension structure and assessing its impact on different staff groups
• Consultation and communications: Clear, proactive communication is essential to build understanding and reduce the risk of industrial action. We prepare written materials, deliver staff briefings and provide practical templates and guidance throughout the consultation phase
• Employment law and contract changes: Where pension changes require updated terms and conditions, our employment specialists manage the drafting, negotiation and implementation process
• Ongoing support: We stay with you through transition and beyond, helping you address emerging questions, staff concerns and the operational impact of change.