Teachers' Pension Scheme
Teachers' Pension Scheme (TPS) is the statutory, unfunded defined-benefit public service pension scheme for eligible teachers and lecturers in England and Wales. It operates on a pay-as-you-go basis, with benefits paid from public funds. As at 31 March 2025, the scheme reported a pension liability of about £290.7 billion.
Overview
Teachers' Pension Scheme (TPS) is the statutory, unfunded defined-benefit public service pension scheme for eligible teachers and lecturers in England and Wales. It operates on a pay-as-you-go basis, with benefits paid from public funds. As at 31 March 2025, the scheme reported a pension liability of about £290.7 billion. The TPS has three sections: two legacy final-salary sections with normal pension ages of 60 and 65, and a career-average section introduced in 2015 under the Public Service Pensions Act 2013, in which the normal pension age is linked to State Pension age. Employee contributions are tiered by pensionable earnings; as of April 2024, the employer contribution rate is 28.6% of pensionable pay, and scheme administration costs are recovered via an additional 0.08% of pensionable pay. Separate teachers’ pension schemes operate in Scotland and Northern Ireland.
Overview
The scheme covers eligible teaching and lecturing staff employed in England and Wales across state-funded schools, maintained nurseries, academies and academy trusts, and further-education colleges. Participation is also available to some higher-education institutions and to independent schools that have elected to join the scheme. The Department for Education is the scheme manager for England and Wales. Day-to-day administration is delivered under the Teachers’ Pensions brand, with services transitioning from Capita to Tata Consultancy Services under a long-term contract running to September 2035. Separate public service teachers’ pension arrangements operate in Scotland and Northern Ireland, each established under their own regulations and administrators. This article covers the Teachers’ Pension Scheme for England and Wales only.
Origins and early superannuation
Teachers in England and Wales moved from local and ad hoc arrangements to statutory superannuation in the early twentieth century, which established a national framework for teachers’ pensions under central government oversight. Early provisions created the basis for later consolidated schemes and permanent administration by the education department.
Inter-war consolidation to post-war settlement
During the inter-war years and after 1945 the teachers’ superannuation framework was consolidated, administration was standardised, and index-linking policy for public service pensions developed over time. These changes embedded teachers’ pensions as a long-term public service obligation rather than a discretionary benefit.
Late twentieth-century changes
From the 1980s to the mid-2000s the scheme was modernised alongside wider public service pension reforms. Access for part-time staff expanded, treatment of multiple employments improved, and scheme rules were reorganised into updated regulations that set the stage for later reform.
2007 reform of the legacy final salary scheme
In 2007 a reformed final-salary section with a normal pension age of 65 was introduced for new entrants, while the earlier section with a normal pension age of 60 remained for existing members. The package adjusted contributions and benefits to reflect longevity and affordability, creating two legacy sections that continued alongside later changes.
2010–2014: Hutton review, legislation and scheme design decisions
Following the review by the Independent Public Service Pensions Commission, the UK Government legislated through the Public Service Pensions Act 2013 and made new scheme regulations for teachers in 2014. The policy decisions taken in this period set the parameters for a career-average design and introduced transitional protections for those closest to retirement.
2015 launch of the reformed career-average section
A career-average section began in April 2015. Pension accrues at 1/57 of pensionable earnings each year and is revalued in service by CPI plus 1.6 percent, with the section's normal pension age linked to State Pension age. Members with legacy service retained their final-salary benefits for pre-2015 service, subject to the scheme's rules on breaks and links.
2016–2019: contracting out ends, valuations, employer rate step-up and sector impacts
Contracting out for defined-benefit public service schemes ended in April 2016 under the Pensions Act 2014. Subsequent valuation outcomes contributed to a higher employer contribution rate and prompted support measures for state-funded providers, while participation by some independent schools became a subject of policy debate.
2018–2022: McCloud and the cost control pause
In 2018 the Court of Appeal held that transitional protection in the 2015 public service reforms was unlawfully age-discriminatory. The Government paused elements of the cost control mechanism and legislated for a remedy in the Public Service Pensions and Judicial Offices Act 2022, while confirming that legacy sections would close to further accrual on 1 April 2022. Valuation and cost control processes were updated through later HM Treasury directions.
2022–present: remedy implementation and current status
From April 2022 all active accrual has been in the career-average section. A retrospective deferred choice remedy applies to service between 2015 and 2022, delivered through Remediable Service Statements and choice exercises for members, including immediate-choice cohorts. Recent departmental reports set out implementation steps, current contribution rates and the scale of the scheme's liabilities.
Primary legislation
The scheme sits within the framework created by the Public Service Pensions Act 2013, which provides for new public service pension schemes in Great Britain and sets out governance roles for the scheme manager and pension board. The Act also provides for the link between the normal pension age in reformed schemes and State Pension age.
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