The Department for Education introduced regulations earlier this month which make a number of changes to the Teachers’ Pension Scheme including to contribution rates. The employer contribution rate will be increasing from 14.1% to 16.4% with effect from 1 September 2015. Although the regulations themselves come into force on 1 April 2015, the rise in the contribution rate has been delayed until the new academic year to allow employers to budget for the new rates.

Employee contribution rates are also changing with effect from 1 April 2015. These will now be:

Annual salary rate Members’ contribution rate
£0 - £25,999 7.4%
£26,000 - £34,999 8.6%
£35,000 - £41,499 9.6%
£41,500 - £54,999 10.2%
£55,000 - £74,999 11.3%
£75,000 + 11.7%

These salary bands will increase each year in line with any increase in the consumer prices index for the month of September, rounded up to the nearest £1. Concerns have been raised about the level of employee contributions and the Department for Education has confirmed that these will be revisited when the next evaluation takes place in 4 years’ time.

The Department for Education has also confirmed that the cost of administering the Teachers’ Pension Scheme will in future be paid by participating employers rather than the Department for Education. Again, this change will be introduced from September 2015 rather than April 2015 in order to allow participating employers to budget for this. It is estimated that this will result in an additional charge to employers of approximately 0.08% of salary costs.

For more information

If you have any questions on these proposals or require advice more generally in relation to the Teachers’ Pension Scheme, please contact Doug Mullen on 0121 212 7432 or douglas.mullen@anthonycollins.com.