Independent schools facing the growing threat of higher pension contributions are turning to Punter Southall Aspire for advice.
The pensions and financial planning consultancy is working with more than 30 private institutions to manage the risk posed by bigger bills for their part in The Teachers’ Pension scheme (TPS).
Growing demand for their counsel comes as the economic impact of covid puts further pressure on the independent sector, forcing schools to offer fee refunds or reductions because of covid restrictions.
Experts predict there is a risk of contributions going up to 30% from 2023 (from 23.68% currently) – with some suggesting that negative interest rates could take them as high as 35%[i]. More than 200 schools have already left the TPS and another 150 are set to do so.
Punter Southall Aspire is working with schools to not only protect the savings of members within the existing scheme but to identify an appropriate defined contribution (DC) arrangement for teaching staff so they can continue saving for their retirement.
Steve Butler, CEO at Punter Southall Aspire, says, “The unwelcome reality is that the changing pension landscape gives independent schools little independence when it comes to managing the costs of their scheme and the retirement plans of their staff. Many are now seeking guidance on how best to proceed in relation to pension provision.
“In recent years, we’ve worked with housing associations facing the same kind of threat from a collective pension scheme. We’ve also helped companies deal with mounting defined benefit pension costs. Now we’re working with schools to offer them a way forward from the one-size-fits-all, unwieldy scheme in which they currently find themselves.
“We help schools assess the position they are in in relation to the contributions they already pay for existing members and the benefits they will receive when they retire. At the same time, we scope the best solution for staff for future pension savings.
“Our approach combines expertise in the DC market with a passion for providing financial education, and our empathetic, clear and supportive work with staff is helping individuals and institutions on a journey to change and managing the impact on school morale.”
For more information visit: www.psaspire.com