University leaders have warned that “eye-watering” increases in employers’ pension contributions could force institutions to cut student support or even move to depart the Teachers’ Pension Scheme (TPS) altogether.
From 1 April next year, employers’ TPS contributions will increase by 5 percentage points, which is expected to cost institutions £125 million a year collectively. The government recently confirmed that English higher education institutions under the TPS will not receive the financial assistance available to schools, although aid for Scottish, Welsh and Northern Irish universities has yet to be ruled out.
Raj Jethwa, chief executive of the Universities and Colleges Employers Association (Ucea), said the new 28.68 per cent contribution rate threatens the sustainability of institutions that are already under significant financial pressure, noting that the TPS is now “one of the most expensive schemes certainly in the sector, but probably across the wider economy”.
Calling the lack of financial assistance “unfair”, Mr Jethwa said a “longer-term settlement” was essential for institutions to remain in the scheme.
