A pass-through agreement is and common way for academies to share the risks of participation in the Local Government Pension Scheme (LGPS) when outsourcing services.
Academies are required to offer their staff access to either the Teachers Pension Scheme (TPS) or the Local Government Pension Scheme (LGPS). Rising costs in both schemes mean that academies are keen to manage those costs and avoid the traps for the unwary.
Helping you choose the right pension scheme
With the growth in the size of multi-academy trusts, they are increasingly developing and investing in infrastructure to support this growth. This provides promotion opportunities for staff but can also lead to unintended consequences for pension scheme members of staff taking promotions. The TPS is for teachers and non-teaching staff are entitled to access the LGPS. Where teachers cease to teach and take on broader responsibilities, care needs to be taken to ensure that they are in the right pension scheme. We have considerable expertise in advising schools on whether staff are eligible to be in the TPS and in helping them to rectify the problems that arise when staff are in the wrong scheme.
Contractors and pension schemes
With many academies contracting out services such as meals and cleaning, the requirement to ensure that transferred staff can still access the LGPS is more relevant than ever. Contractors are increasingly reluctant to take on the risks of variable contribution rates, strain costs and exit payments and often seek to pass these risks back to the academy. These liabilities can be significant and being clear upfront about what risks a contractor is expected to take on is critical and, even then, detailed negotiation is often required. We have considerable experience in advising on and negotiating detailed pension arrangements in outsourcing situations and helping academies ensure that they understand the arrangements they are entering into so that they manage risks appropriately. Our experience in advising contractors, as well as academies and other LGPS employers, means that we are able to provide academies with valuable insight into the approach taken by contractors.
Managing pension change programmes
Academies are understandably keen to minimise the substantial additional pension contributions that can arise both in redundancy and restructuring situations but also when staff take an early release of pension benefits on grounds of ill-health. Often these costs are unavoidable but we have advised a number of LGPS employers on how best to manage change programmes to minimise pension strain costs on redundancy or business efficiency. We have also helped ensure that decisions on ill-health benefits are appropriately managed to avoid unnecessary costs.
Support with pension policies
Another way in which we help academies manage their cost pressures is by ensuring that they have robust policies in place dealing with the exercise of discretions under the LPGS regulations. All LGPS employers are required to have policies in place to outline how certain discretions will be exercised and we help with formulating and reviewing these policies, as well as advising on the exercise of discretions.
Managing pension-related appeals
Where employees are unhappy about decisions taken on their pension benefits, we also help academies to manage appeals under the internal dispute resolution procedure. Our considerable experience in this area means that we are able to advise quickly and cost-efficiently.
Helping teachers as people
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As a teacher, or a professional working in the education sector, there are multiple issues that you may face. Whilst we do offer advice about educating children from a variety of backgrounds in a safe and caring environment, we also offer advice to you as an individual. We understand that the pressures and numerous challenges facing those in charge are not always classroom based.
Education is one of our core sectors. This allows us to combine our specialist subject knowledge and experiences with our personal approach to individual cases. Our clients tell us that the service they receive from us is unique, and we believe this comes directly from our commitment to the purpose of our firm: 'to improve lives, communities and society’.