Union bosses have urged education secretary Bridget Phillipson to “encourage” United Learning to abandon its plans to offer an alternative pension scheme next year.
The ASCL, NAHT, NASUWT and NEU unions today published a joint letter to Phillipson, calling on government to ask the trust to “withdraw this proposal”. They warn it could “threaten” the public sector pension scheme’s “stability and long-term future”.
Schools Week last week revealed the country’s biggest trust will offer teachers the choice of an alternative pension scheme from 2025, alongside the teachers’ pension scheme (TPS).
While it will be less generous than the TPS, the trust would still contribute at least 10 per cent. Money saved from its employer contributions would be used to boost starting salaries to up to £45,000 in inner London and £38,000 elsewhere.
Chief executive Sir Jon Coles said this would attract new graduates to the profession and help young teachers save for a house deposit. Teachers can also opt back into the TPS.
Unions demand ‘urgent’ meeting
But the unions have requested an “urgent” meeting with Phillipson.
The letter, co-signed by the unions’ four general secretaries, expresses “alarm at this wrong-headed and divisive move” and claims they were not consulted, something United Learning denies.
They say the proposal “could all too easily lead to a drop in participation rates in the TPS, which may in turn possibly threaten its stability and long-term future”.
“We are united in our view that no teacher or leader should have to sacrifice the value of their future pension (salary deferred) in order to improve their take home pay,” they add.
“Such short-sighted and ill thought through policies simply store up problems in the decades to comes and undermine the proposition for committing to a career in teaching.
“We are certain that government would not want such an important public sector scheme to be put at risk.”
They warn that if other trusts follow suit the ensuing arms race could pose a “threat to the very future” of the teachers’ pensions scheme.
Currently, teachers have to pay between 7.4 and 11.7 per cent in pension contributions to the TPS. Employers must pay 28.6 per cent of the teacher’s salary.
‘Plan does not undermine TPS’
Under United Learning’s plan, teachers who wanted to opt out of the TPS would be able to contribute either 0, 5 or 10 per cent of their salary in a new defined contribution scheme.
The trust would contribute at least 10 or 20 per cent.
For teachers contributing nothing towards their pension and getting 10 per cent from their employer, this would equate to a 15 per cent salary uplift.
Coles said the proposal is about giving teachers an additional choice and “nothing about it undermines” the teachers’ pension scheme, which will “remain permanently available to all current and future staff”.
He said the two options would cost United Learning the same whichever route teachers choose.
Those looking at taking up the new option would also “have access to independent financial advice funding by us”, Coles added.
He said the option may be attractive to the one in 10 teachers aged under 40 at United Learning who have already opted out of the TPS due to its costs, or those in the private sector because of its higher pay but who currently get less than 10 per cent in employer pension contributions.
“We have made clear that we will consult further, including with the unions and I have spoken personally to all the signatories of the letter and offered to discuss further,” Coles added.
The Department for Education have been approached for comment.
Labour’s ‘first big test’
United Learning has sought advice and believes its plans are compliant with academy funding and wider pension regulations.
But the unions claimed that “at the very least, this undermines the spirit of the pension regulations, which were last reviewed in 2021”.
The case will be the “first big test for the new Labour government” on it stance towards academy freedoms, said Jonathan Simons, head of education at consultancy firm Public First.
The party has so far said little about its approach to regulating academies, apart from plans to force all schools to follow the national curriculum.
But Simons added Phillipson should “hold firm and reject this scaremongering. In the teeth of a teacher recruitment and retention crisis, schools and trusts offering innovative and well thought through solutions should be supported, not dismissed.
“And young teachers should expect better from their unions than to be told they can’t be trusted with their own financial planning – and implicitly, to be told that they should sacrifice what is best for them in order to prop up pensions for older teachers.”
While heavily-criticised by unions, some in the sector posting on X welcomed the plans.
Trust finance lead Micon Metcalfe added it was a “conversation that definitely needs to happen”.
