Universities’ TPS costs ‘could fall by as much as 10 per cent’

Employer contribution rates to the Teachers’ Pension Scheme (TPS) may fall by as much as 10 per cent next year, experts predict, relieving pressure on cash-strapped post-92 universities.

Calls are growing for institutions to halt plans to change staff employment terms in light of the coming changes, with the chair of the House of Commons Education Select Committee the latest to criticise those setting up subsidiary firms to bypass having to offer the expensive scheme.

Universities required to offer TPS by law have recently been told to expect employer contribution rates, which currently stand at 28.68 per cent of pay, to fall from April 2027.

The expected drop has been triggered by forecasted changes to the Superannuation Contributions Adjusted for Past Experience (SCAPE) rate, which helps determine TPS contributions, and is linked to long‑term UK GDP growth.

John Ingoe, an associate partner at First Actuarial, said that TPS contribution rates are very sensitive to changes in the SCAPE rate.