Schools & Teachers’ Pensions

Pilot provides specialist, independent advice on Teachers’ Pensions and other workplace pension schemes. More broadly, we offer consultancy on a wide range of employee benefits, working with governors, bursars, head teachers and their management teams to design and implement attractive and cost-effective remuneration structures.

We have an in-depth knowledge of the independent schools sector and collaborate regularly with representative bodies, including the ISBA, HMC & GSA. A range of services is offered to schools, either on a retained or fixed fee basis. These include: detailed modelling of Teachers’ Pensions benefits; senior remuneration and pension taxation consultancy; staff presentations and individual retirement planning support; Defined Contribution (DC) workplace pension scheme reviews; group protection advice and flexible employee benefit programmes.

Given the steep increase in employers’ contributions to Teachers’ Pensions, Pilot is working closely with schools across the UK, offering advice and impartial guidance on the various strategic options. Where alternative solutions are being considered, we are able to support schools through the planning, consultation, and implementation phases of any proposed changes.

We also work directly with teachers across the country, using our in-depth knowledge of Teachers’ Pensions to provide a remote advice service via phone and video-conferencing technology.

Please click on the links below to find out more.

Teachers' Pensions Review Services

The increase in employers’ Teachers’ Pensions contributions from 16.48% to 23.68% is causing many independent schools to question the appropriateness and sustainability of ongoing scheme membership. Pilot is well-placed to support any review of Teachers’ Pensions, with an informed and truly independent perspective on the key issues and risks, and able to deliver support at each stage of any potential consultation with staff on the introduction of an alternative workplace pension and benefit package.

Decision-Making Phase

  • Support to the governing body in making a provisional decision on future membership of Teachers’ Pensions
  • Board report and analysis, including bespoke modelling of the impact of a move to a DC pension for teachers at different career stages
  • Attendance and facilitation at governing body/working group meetings

Planning & Consultation Phase

  • Design and costing of alternative remuneration, pension and benefit structures
  • DC pension scheme open market review and selection process
  • Staff presentations & communications

Implementation Phase

  • DC pension scheme set-up
  • Introduction of pension salary sacrifice
  • Arrangement of group protection and other employee benefits
  • Design, implementation and ongoing administration of an employee benefits ‘flex’ platform
  • Guidance to employees on pension, investment and other personal finance questions
Services to Schools

A number of factors are contributing to an increased need for schools to develop a pensions and employee benefit strategy:

  • Normal retirement ages are moving upwards towards 68 – and possibly higher – with potentially significant consequences for overall remuneration costs.
  • As a longer working life becomes the norm, the use of Teachers’ Pensions as the primary (or only) non-salary benefit is coming under scrutiny. What other options are there to attract, engage and retain the best staff, in a cost-effective way?
  • The increases in employer pension contributions, employer NI costs and the introduction of auto-enrolment responsibilities are increasing pension-related overheads.
  • The reduction in Lifetime and Annual pension allowances are negatively affecting many senior and long-serving members of staff, with implications for the recruitment, retention and efficient remuneration of heads and senior management teams.

To help you meet these challenges, Pilot offers a range of consulting services in the following areas:

Flexible employee benefit solutions

  • Audit of existing benefit provision
  • Design, implementation and administration of employee benefit ‘flex’ packages

Defined Contribution (DC) pension scheme consulting

  • Scheme assessment and open-market reviews
  • Introduction of pension salary sacrifice
  • Auto-enrolment compliance
  • Investment advice
  • Employee communication
  • Ongoing scheme governance

Retirement planning support

  • Detailed retirement solutions for specific members of staff
  • Pre-retirement workshops
  • Pensions aspects of redundancy & re-structuring

Staff engagement & education

  • Group presentations
  • On-to-one staff consultations

Senior remuneration planning

  • Mitigation of the Annual and Lifetime Allowance tax charges
  • Alternative remuneration strategies
Advice for Teachers
Pilot offers specialist, independent support and guidance to teachers on Teachers’ Pensions and other related financial matters.

Our services will vary depending on your individual circumstances but we can assist in the following areas:

  • Retirement and early retirement planning
  • Phased retirement
  • Retirement and re-employment in a part-time role
  • Enhancing your pension benefits
  • Private pension arrangements
Advice for Head Teachers
At Pilot, we specialise in advising heads and their governing bodies on how remuneration may be structured most efficiently to maximise future pension benefits, whilst mitigating any liabilities to pension taxation – specifically the Lifetime and Annual Allowance tax charges.

We can advise on a range of remuneration and pension-related issues including:

  • Excessive pension accrual and the Annual Allowance tax charge
  • Residential Emolument considerations
  • Retirement strategy and Lifetime Allowance planning
  • Bonus schemes and Long Term Incentive Plans
  • Salary Sacrifice arrangements
Teachers' Pensions & Taxation
Annual Allowance & Lifetime Allowance Taxation

To encourage us all to make adequate retirement provision, pensions enjoy a preferential tax status in the UK. Features such as tax relief on contributions, tax advantaged growth on any invested assets and a tax-free lump sum payment at retirement are all key benefits.

The Annual and Lifetime pension allowances were introduced by the Government in April 2006 as part of so-called ‘pensions simplification’. The objective was to create a single legislative framework for all types of pension in order to improve competition, reduce complexity and increase the overall attractiveness of pension saving yet further.

Initially, the Lifetime and Annual allowances were intended to prevent abuse of the pension system by ‘the wealthy’. Both allowances were set at a relatively generous level and, for the first few years, were increased steadily.

In recent years, however, both the Annual Allowance and Lifetime Allowance have been reduced substantially, making them relevant to a much wider group of people than originally intended.

A Complex Situation

The situation for many senior and long-serving teachers is made even more complex through the interaction of the pensions tax legislation with the very particular rules of the current Teachers’ Pension Scheme.

It is possible to mitigate against the effects of the reductions to the annual and lifetime allowances, but it is not always in your best interests to do so. In most cases, a detailed analysis of the costs and benefits of alternative potential strategies should be considered before taking any action.

Please contact Pilot to obtain copies of our briefing notes on the Annual and Lifetime Allowances for members of Teachers’ Pensions.

Registered address:
56 High Street, Totnes, Devon, TQ9 5SQ

Tel: 01803 864 092

Email: info@pilotfinancial.co.uk

Pilot Financial is a trading name of Pilot Financial Planning Ltd, which is authorised and regulated by the Financial Conduct Authority, and Pilot Financial Consulting Ltd.

The Financial Conduct Authority does not regulate all products and services on this website.

Pilot Financial offers services only to clients in the UK.

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