School 2 decides to exit TPS and offer a defined contribution workplace pension.

All existing, and future, eligible teaching staff will be automatically enrolled in the alternative workplace pension scheme, unless they choose to opt out.

Existing teaching staff will no longer be able to build up benefits in TPS, however, their existing TPS will be deferred until retirement, unless they re-join TPS with a future employer, or transfer their benefits to an alternative defined benefit pension scheme via a future employer.

The school will need to conduct a consultation exercise to consider what workplace pension is right for their teaching staff. Feedback will help provide insight into what employees value in a pension, for example - affordability, responsible investment solutions, a range of at retirement options.



  • The school will set employer and employee contribution rates, subject to statutory minimums.
  • Likely cost savings over the long term with control over the rate of future employer contributions, subject to statutory minimums.
  • Employee contributions can be deducted on a relief at source or salary exchange basis, meaning a potential for NIC savings. Unlike TPS, the relief at source system would enable employees who earn less than the Personal Allowance to still benefit from tax relief on their pension contributions.
  • The new workplace pension can be open to both teaching and non-teaching staff, giving the option to operate one scheme only.
  • All teaching staff will be treated consistently. They’ll have access to the same pension benefits with no impact to their salary, minimising any risk of employment equality disputes.
  • All teaching staff will now have access to flexible retirement options such as, taking one or more cash lump sums, a regular income with a drawdown facility, or a secure income via an annuity purchase.



  • A consultation period and contractual changes will normally be required and the school may incur legal and financial advice costs.
  • Future teaching staff are unable to join TPS, or retain access if they come from a school that offers TPS, which could be a disadvantage when recruiting.
  • The value of employees’ pension benefits at retirement are likely to be lower than those provided by membership of TPS.