Letter: Indexation in the Teachers’ Pension Scheme

Joint union letter to Local Authority Directors of Children’s Services, Chairs of school and academy trust governing boards, Academy Trust Chief Executive Officers about an issue of crucial importance to the pension provision of teachers and school leaders.

November 2021

Indexation in the Teachers’ Pension Scheme

We are writing to you about an issue which is of crucial importance to the pension provision of teachers and school leaders... indexation in the final salary section of the Teachers’ Pension Scheme (TPS).

The 2010 TPS Regulations, which apply to this scheme, establish that the calculation method for the ‘best consecutive three years in ten’ average salary only applies indexation if the salary rate changes. This leads to non-indexation of benefits during periods of pay freeze and consequent pension losses for teachers and school leaders.....

  • ...An increase in the salary rate triggers indexation but a salary freeze does not trigger indexation.  The Department for Education (DfE) accepts that this is the position.
  • As unions, we have asked the DfE to amend the Regulations above, but even if the DfE agrees this would not happen quickly and, certainly would not apply retrospectively to 2021/22.
  • There is, however, a remedy to this situation, which is not costly for schools and academy trusts, but would potentially make a significant difference to the pension levels of the teachers which you employ....
  • ...A recruitment and retention payment, at any level, would change pensionable salary and this would trigger TPS indexation under the circumstances which we have set out above. There is no specific threshold of payment which would trigger TPS indexation.
  • This would not be costly – for example, a payment of £1 per teacher would be sufficient to trigger TPS indexation. We are not asking for a commitment for this payment to be repeated in subsequent years – however, the earlier this payment can be made in 2021/22 the greater the pension benefit.
  • In respect of school leaders, we encourage you to explore the flexibilities which exist within the STPCD [School Teachers’ Pay and Conditions Document] and your pay framework to ensure that school leaders do not have their pay frozen for 2021/22.
  • Please do discuss our requests directly with the representatives of our unions

Read the letter in full

Geoff Barton – General Secretary, ASCL
Paul Whiteman – General Secretary, NAHT
Mary Bousted – Joint General Secretary, NEU
Kevin Courtney – Joint General Secretary, NEU
Patrick Roach – General Secretary, NASUWT
Deborah Lawson – Assistant General Secretary, Voice Community

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