Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the factors that led to the reduction in the Teachers’ Pension Scheme employer contribution rate from 28.68 per cent to 17.68 per cent from April 2027; and whether her Department has assessed the likelihood of employer contribution rates increasing again at the next scheme valuation or review.

The primary objectives of public service pension valuations are to ensure schemes are affordable, sustainable, and fair to both taxpayers and workers. The government remains committed to these objectives.

The Teachers’ Pension Scheme employer contribution rates will be 17.68 percent from April 2027 to March 2031. This rate was determined using a consistent and well-established methodology set by HM Treasury and informed by advice from the Government Actuary’s Department.

The department recognises the importance of giving employers sufficient notice of contribution rate changes and will continue to engage with stakeholders throughout future valuation exercises to support effective financial planning. The next valuation is not due to complete until 2030 and will be based on future data and assumptions that are not yet available. It is too early to speculate on the potential outcome of the next valuation.

The department recognises that changes in employer contribution rates can affect the financial planning of participating higher education (HE) institutions and understands the importance of having timely clarity as they prepare for the implementation of any changes from April 2027. The valuation cycle provides employers with advance notice of changes, and a clear and stable contribution rate for the years covered. The department will continue to support transparency and predictability in future contribution rate setting.

HE providers, as autonomous institutions, are responsible for making their own business decisions in response to changes in Teachers’ Pension Scheme employer contribution rates. As set out in the Post-16 Education and Skills White Paper, the government continues to engage with HE providers and workforce representatives to better understand concerns relating to pension provision in the post-1992 HE sector, including affordability and sustainability.