Confused teacher pension rules could leave academy bosses at risk of losing retirement benefits, legal experts warn, sparking calls for the government to clarify eligibility.
Widespread confusion over who can join the Teachers’ Pension Scheme (TPS) prompted one trust to switch its central team to an alternative in a bid to stay on the right side of the rules.
Meanwhile, another academy chain has banned management remaining on the TPS. But other trust chief executives are still on it.
Experts say the grey area could leave some leaders refused benefits when they retire, or leave trusts liable to refund contributions if found to have incorrectly kept staff with on the TPS.
And muddying the waters further, those in similar management positions leading religious boards of education have a carve-out that makes them eligible for a teacher’s pension.
Call for clarity
Jean Boyle, a partner at the law firm Stone King, wants the “grey area” resolved. “It would be extremely helpful if the TPS could provide further guidance on this point.”
Staff are eligible if they are in a “predominantly teaching role”, official TPS guidance states.
The rules do not, however, expressly state what “teaching work” is. Instead, teacher disciplinary regulations are relied on, which define it as planning and preparing lessons, delivering lessons, and reporting on or assessing pupil progress and attainment.
An update last year said it was “unlikely” executive heads and chief executives would “fulfil all parts” of these. However, they may be eligible under the last clause – as long as they are “directly responsible” for reporting or assessing pupil progress.
If the responsibility is delegated to another staff member, they “fall outside of the scope”.
“There must be a degree of proximity to the pupil or student,” the guidance says.
Staff in “a financial or administrative role” will not be eligible, with the most likely alternative being the local government pension scheme (LGPS).
Employers are also told to be “particularly careful” over eligibility for CEOs who started out as teachers – which is the majority.
Mary Bousted, the former joint general secretary of the National Education Union, said: “It’s difficult to argue that you can have it both ways – that you can have a private sector-equivalent salary [as a CEO] and get membership of the TPS.
“It’s a bit as though you’re having cake and eating it here.”
Forty-five per cent of senior trust leaders were on the TPS in 2021, show figures compiled by the Confederation of School Trusts (CST), with most of the rest enrolled with the LGPS.
Melanie Moffat, a pensions specialist at the Association of School and College Leaders (ASCL), stresses both public sector schemes offer “broadly comparable benefits”. Employees will “only be eligible for one or the other depending on the exact nature of their role”.
Frustrations over rules
Of England’s 20 largest MATs, 14 confirmed their chief executives were not with the TPS. Six did not respond.
Accounts for Delta Academies Trust suggest Paul Tarn, its chief executive, was with the TPS between 2016 – when he took on the role – until February 2022. Since then, he has been with the LGPS.
The trust did not comment on why the switch was made.
GLF Schools said it has “a very clear policy on the TPS – we believe the scheme is for teachers and not management”. None of its executive team is a member of the scheme.
Oliver Burwood, of the Diocese of Norwich Education and Academies Trust, “found the greyness [around eligibility] frustrating”.
TPS and union advice “led us to believe that the CEO role may (although not definitively) not be eligible”. The trust decided the “right thing to do” was to move to LGPS as there was “no doubt about eligibility”.
Rob McDonough, the chief executive of the East Midlands Education Trust, thinks it becomes “more challenging” for leaders to remain on the TPS “if they move into a central position”.
“Perhaps only those in the smallest trusts will retain any semblance of hope of remaining in the scheme.”
Schools Week has spoken to the chief executives of four small to medium-sized trusts who are still members of the scheme.
Andrew Minchin, of the Beyond Schools Trust in Kent, said he and his executive team are “actively involved in going into classrooms and supporting teacher development” by, among other things, quality-assuring lessons.
Action taken after pension breaches
TPS guidance states it is for employers “to determine the eligibility”. This is because they are “more likely to understand the main thrust of a person’s job role in line with a person’s contract of employment”.
ASCL guidance says “action will be taken by the TPS to correct the position and the contributions refunded” if an “individual is incorrectly placed into” it.
In such circumstances, Boyle says that at “the point of retirement” the pension provider could “in theory refuse to pay out benefits”.
While the TPS would likely refund “contributions to the trust and the employee, the CEO would be effectively without a pension [for the period they were ineligible], which could result in liability for the trust concerned”.
The outsourcing firm Capita, which administers the scheme, says it “monitors and records all participation in the TPS and will investigate whether that is in accordance with the regulations, if there is reasonable cause to do so”.
Where it has identified someone who is ineligible, “all applicable service is removed”. In many cases they will be able to join the LGPS and the service “moved with the appropriate adjustment to contributions”.
The Department for Education did not respond when asked how many times this had happened.
Warnings over ‘significant’ payouts
Leaders’ union the NAHT recommends decisions over chief executive and executive head eligibility should be recorded in governor or board minutes. This would “provide the employer with a defence should the individual’s membership… be the subject of a challenge”.
Doug Mullen, a partner at law firm Anthony Collins, has said that academy trusts should ensure “only eligible” staff join the scheme “to avoid significant awards for distress”. They could also be left “having to fund equivalent benefits outside the scheme that could be costly”.
Labelling CEO eligibility “a grey area”, Boyle adds “most” continue to be active, eligible members of TPS, with many making “life plans” based on this.
At Insignis Academy Trust, central staff with responsibilities for learning are designated as teachers in a “linked school”.
Garret Fay, its chief executive, could “be timetabled in that school” to provide cover. He is also “heavily involved in discussions around curriculum planning” for each of his academies, an area “some CEOs have no engagement with”.
Samira Sadeghi, CST’s director of trust governance, stresses there is not a “one-size-fits-all answer on eligibility”.
She encourages academy chains to “regularly review pay and conditions for senior staff in the round… particularly in the light of any changes to the trust’s structures”.
Diocese directors carved out
Despite this, there are circumstances where staff can still be eligible for TPS without involvement in “teaching work”. They are referred to as “organisers” in the regulations.
Individuals performing “duties in connection with the provision of education… other than administrative services” in diocesan boards of education (DBEs) and Roman Catholic diocesan schools commissions can access the TPS.
The bodies have responsibility for the church or Catholic schools, with DBE responsibilities stretching to religious education and collective worship.
Accounts for five DBEs show they have staff on the scheme. Carolyn Shoyer, Leicester’s diocesan director of education, and her deputy director of education are both members.
Shoyer says there “is no grey area for those working for a diocesan board of education” and that staff who do not hold QTS are instead members of a church fund.
Those working for charities the Inspiring Futures Foundation and Stapleford Centre, with the Royal National College for the Blind and bodies affiliated to the National Open College Network are also included under the “organiser” exemption.
The DfE says it is up to an employer to decide “whether an individual meets the necessary criteria to participate” in the TPS.
