Urgent review needed on approach to public service pensions, says MillionPlus

Million Plus's picture

21 Sep 2018

MillionPlus, the Association for Modern Universities, has today (21 September) called for an urgent review of policy on public service pensions as a possible 7% hike in employers’ contributions to the Teachers’ Pension Scheme (TPS) leaves almost half of universities in England and Wales facing a cliff-face of increased costs. The increase in contributions is a sign of a failing government approach to public sector pension schemes, the organisation said.

HM Treasury announced new rules for the valuation of public service pension schemes in September 2018, which applies to three schemes (the TPS, Local Government Pension Scheme and the NHS scheme) of which most staff in universities created since 1992 are members.

Greg Walker, Chief Executive of MillionPlus, said:

“News that nearly half of England and Wales’s universities will see a potential 7% increase in employers’ contributions for their academic staff without any phasing or transitional support is of huge concern. These contribution hikes are based on government policy, not university decisions. The panel for the Post-18 Education Review, chaired by Philip Augar, must factor in the major cost increases this will mean for many universities and colleges when considering the cost of provision for students and future funding levels.

“Many will be perplexed by the expectation, trailed by the Chief Secretary to the Treasury earlier this month, that there will be a further increase in member benefits without any additional contribution from employees towards the increasing cost of the TPS.

We need an urgent review of this failing approach to the valuation of public pensions schemes, a policy that the Chief Secretary herself has implied needs to be addressed. I am seeking a meeting with Treasury Ministers on this matter at the earliest opportunity having written to Liz Truss earlier today calling for a review.

ENDS

Notes to editors

  1. For further information or to arrange an interview, please contact Dan Blows on 020 7717 1658 or email press@millionplus.ac.uk
  2. The Treasury statement announcing the new valuation rules for public service pension schemes can be found here. In the statement the Chief Secretary to the Treasury, Liz Truss, openly questioned whether the valuation approach to the pension schemes operated “in line with the original policy intentions [of the government in 2015]”. Schools and academies have been promised transition relief for the increased costs of the TPS in 2019/20 by the government.
  3. MillionPlus is the Association for Modern Universities in the UK, and the voice of 21st century higher education. We champion, promote and raise awareness of the essential role and impact of modern universities in the UK’s world-leading higher education sector. More information can be found at www.millionplus.ac.uk
  4. What are modern universities? Modern universities are long established centres of higher education in their communities with roots that stretch back decades, if not centuries. Many gained university title following legislation agreed by parliament in 1992. They make up almost half of the UK university sector with over a million students studying at modern universities every year.
  5. Modern universities: key facts 2018
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