Schools & Teachers’ Pensions

Pilot provides specialist, independent advice on Teachers’ Pensions and other employee benefits. We are retained by a number of the UK’s leading schools to provide support to governors, bursars, head teachers and their management teams.

Using our proprietary models of Teachers’ Pensions, we are able to model a wide range of potential scenarios with a high degree of accuracy and, in doing so, help you to maximise the value of the scheme from both an employer’s and an employee’s perspective.

Our services to schools include: senior remuneration and pension taxation consultancy; retirement planning advice; support staff pension scheme governance; implementation of flexible employee benefit solutions and staff presentations.

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 web-conferencing technology.

Please click on the links below to find out more.

Services to Schools

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

Senior remuneration planning

  • Mitigation of the Annual and Lifetime Allowance tax charges.
  • Alternative remuneration strategies

Retirement planning

  • 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

Flexible employee benefit solutions

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

Support staff pension scheme governance

  • Auto-enrolment compliance
  • Investment advice
  • Communication to employees
  • Ongoing administration
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
Support for Finance & HR Functions

Financial pressures on schools continue to mount, and the costs of pension provision – both direct and indirect – are exacerbating the issue.

Following changes to the employer contribution to Teachers’ Pensions in 2015 and employer NI in 2016, the upcoming Teachers’ Pension Scheme valuation in 2017-2018 is likely to increase employer pension costs once again.

Pension provision is now also compulsory for nearly all staff and the legal responsibilities for employers, contained within the auto enrolment legislation, are creating new overheads.

Perhaps an even more significant issue from a strategic perspective, however, is the change to the State Pension age. There is a risk that as many staff are effectively forced to work longer before they can afford to retire, average salary costs – particularly for teachers – will start to drift upwards.

As schools adapt to the ageing workforce, it will fall on Finance and HR teams to manage both the financial and the human consequences.

Pilot offers consulting services designed to address both immediate and longer-term pension and retirement planning challenges. Our employee benefits solutions can also support a wider people strategy that addresses the needs of employees at all stages of life.

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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