Teachers’ Pension Scheme

What is the Teachers’ Pension Scheme?

The Teachers’ Pension Scheme in England and Wales (TPS) is a contributory, defined benefit public service occupational pension scheme. A defined benefit scheme provides a promised pension in retirement, usually based on average salary and length of service.

The scheme is administered by Teachers’ Pensions. The scheme consists of three different sections:

The scheme sections

The TPS consists of three different schemes or ‘sections’:

• Final salary section (80^th), which was open to new members until 1 January 2007. This section provides pension benefits based on a rate of 1/80th of a members’ final salary, multiplied by length of service.
• Final salary section (60^th), which was open to new members until 1 April 2015. This section provides pension benefits based on a rate of 1/60^th of a member’s final salary, multiplied by length of service.
• Career average section, the current section, which was introduced on 1 April 2015. All serving members on that date transferred to the 2015 scheme unless they qualified for ‘transitional protections’. This section provides pension benefits based on career average earnings rather than final salary. This means that pension benefits are calculated according to average earnings over a member’s career.

McCloud remedy

The government reformed public service pensions in 2014 and 2015. Like members of other public service schemes, teachers were transferred to the reformed career-average scheme. The government decided that members closest to retirement would not be affected by the reforms. In many cases these members could stay in the existing ‘legacy’ schemes rather than moving to the newer ‘reformed’ schemes.

In 2018, the government was found to have discriminated against younger members of public service pension schemes. The judgment, known as McCloud, resulted in the government making changes to public service pension schemes to remedy discrimination which had taken place.

More information on the McCloud remedy is available in the Library briefing Public service pensions – response to McCloud.

Devolved legislatures

This briefing covers the Teachers’ Pension Scheme in England and Wales only.

Scotland

Although occupational pension policy is generally reserved to the UK Parliament, Scottish ministers have the power to make public sector pension scheme regulations and are responsible for the administration of the schemes. The Scottish Public Pensions Agency carries out the administration of pensions for teachers and other public servants on behalf of the Scottish Government.

Northern Ireland

Pensions in Northern Ireland are a devolved matter, though Northern Ireland’s pension policy and legislation operate in line with corresponding provisions in Great Britain.

Further information

Teachers’ Pensions

Teachers’ Pensions is responsible for administrating the Teachers’ Pension Scheme. Section 4 of the Library briefing Pension FAQs: Occupational and personal pensions contains information about the complaints process for occupational pension schemes.

For further information on the development of the TPS, see the Library briefings:

• Teachers’ Pension Scheme – background (September 2013)
• Teachers’ Pensions – 2015 reforms (June 2020)