Employer contribution rate rise
Employer contributions to the TPS – a public sector pension scheme – are set at regular valuations. The valuation process assesses the long-term cost of providing pensions and other benefits to members of each public service pension scheme and determines the appropriate employer contribution rates going forward.
Following the outcome of the latest valuation, the Department for Education has announced that the teachers’ pension scheme employer rate from 1 April 2024 to 31 March 2027 will rise by 5% to meet present and future obligations. This takes the contribution from 23.6% to 28.6%.
Impact on finances
Schools are facing inflationary and other financial pressures, so will welcome the good news that the increased contribution will be funded for 2024/25, other than for Independent Schools. However, no confirmation of funding for future years has yet been confirmed, but it will be considered in future Spending Reviews.
Impact on Financial Statements
For those academies producing their own financial statements, the pension note disclosures in the accounts, which currently still refer to the 2016 valuation, will need to be updated.
Further Information
Further information can be found in the following reports released by the Government Actuary’s Department:
The next step
If you have any further questions regarding this insight, please contact Thomas Devonshire at tom.devonshire@uhybirmingham.co.uk or your usual UHY adviser.
