The Academies Financial Handbook is updated annually by the Department for Education and the Education and Skills Funding Agency; it contains a number of governance requirements for academy trusts.
Ms Stephens was employed at Croydon College in 2001 and, as a part-time teacher, she was not automatically a member of the TPS. She chose to join the TPS. In July 2002 she applied for a new role as a sociology teacher at Langley Park School for Girls (“the School”). She was asked whether she was a member of the TPS. She wrongly confirmed that she was not a member and had not chosen to join the TPS whilst at Croydon College.
The School should have sent a notification of teacher appointment form to the TPS but this was either not sent or was lost by the TPS. On balance, the Pensions Ombudsman concluded that the form was never sent. Had it sent the form, the School would have been alerted that Ms Stephens had given incorrect information and was a member of the TPS and that contributions were therefore due. On 1 September 2002 Ms Stephens began part-time employment with the School and over the next 9½ years no contributions were made either by Ms Stephens or the School.
The School became an academy in 2011 and Ms Stephens completed a new form on 1 August 2011 to confirm whether she was or wanted to be a member. Her completion of the form was rather contradictory and as a result the school contacted the TPS to check whether Ms Stephens was in fact a member. The academy then started to deduct pension contributions from Ms Stephens’ salary and to make employer contributions from 1 April 2012.
In June 2013 the TPS then invoiced the academy for the arrears of pension contributions and interest which had accrued between 1 September 2002 to 31 March 2012. Ms Stephens was asked to complete a retrospective election to opt out of the TPS with effect from 1 September 2002 but refused to do so. The TPS refused to accept that the academy had no liability to make the contributions.
The academy complained to the Pensions Ombudsman and argued that:
- Ms Stephens had misled it;
- That the TPS had mal-administered the scheme by failing to keep proper account of contributions due and to carry out routine checks and to seek payment in a timely manner;
- That Ms Stephens did in fact make a valid choice to opt out when she joined the School in 2002;
- That the TPS was prevented from claiming the contributions because neither the School nor Ms Stephens had any expectation that she would receive benefits from the TPS for the relevant period;
- That the forms filled in by Ms Stephens amounted to a contract which overrode the statutory rules of the TPS;
- That at least some of the liability should be reduced on the basis that the TPS was out of time for claiming anything before March 2008.
The Pensions Ombudsman decided that:
- There was a valid initial choice and that Ms Stephens had not opted out;
- That the School did not properly notify the TPS of Ms Stephens’ appointment;
- That the TPS had not mal-administered the scheme because it was the School’s obligation to ensure that correct contributions were made;
- That the TPS were not prevented from recovering the contributions just because the School and Ms Stephens did not expect that she would be entitled to benefits for the relevant period;
- That there was no contract in place overriding the rules of the scheme;
- That there was no time limit issue in this situation because the TPS only became aware of the unpaid contributions in about March 2012;
- That the academy was liable to pay interest (at 12% for part of the period) under the rules of the TPS.
This decision highlights the need for employers to ensure they submit the appropriate forms to the TPS (and to keep evidence that they were sent). Had the appropriate form been sent (or evidenced that it had been sent) in 2002, it is likely that the Pensions Ombudsman would have reached quite a different conclusion.
Interestingly, the Pensions Ombudsman indicated that it might be open to the academy to argue that Ms Stephens should be required to complete a retrospective opt-out form but that he did not have jurisdiction to consider this and so that would need to be considered in the courts.
One point that does not appear to have been raised is that the academy could have argued that it was a different employer to the original foundation school and that any liability for the period before it became an academy should have fallen on the governors of the foundation school (which would have been dissolved when the School became an academy).
For advice on whether part time teachers are members of the scheme or on the Teachers’ Pension Scheme more generally, please contact Doug Mullen
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