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ARTICLE · 09 NOVEMBER 2026

Hot Topics In Pensions

Eversheds Sutherland
Eversheds Sutherland
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Eversheds Sutherland

Eversheds Sutherland

Eversheds Sutherland in Italy was founded more than 40 years ago and now has more than 80 lawyers...

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The UK government has announced an 11-percentage-point reduction in Teachers' Pension Scheme employer contributions from April 2027, alongside regulatory changes affecting pension arrangements, salary sacrifice rules, and early retirement ages. New financial handbook requirements now mandate DfE approval before introducing alternative pension schemes, while recent legal decisions clarify limitation periods for pension transfer claims and reinforce employer obligations for accurate record-keeping.

United KingdomEmployment and HR
Georgina Rankin
Georgina Rankin
Yatin Arora
Yatin Arora

TPS employer contribution rate set to drop

Following completion of the 2024 valuation of the TPS, the government has announced that the employer contribution rate will decrease from 28.68% to 17.68% of pensionable pay from 1 April 2027. This 11-percentage-point reduction – the largest in the scheme’s recent history – is driven by changes to the SCAPE discount rate (the government assumption used to calculate the present-day value of future pension benefits). The reduction will not affect member benefits. However, government funding will be reduced to reflect the decreased pension costs.

Action – Employers should review their budgets and financial plans to account for the reduced contribution rate. Plans to move staff into subsidiary companies or introduce alternative pension arrangements may now be harder to justify given the anticipated savings from lower employer contributions. However, employers should remain mindful of the volatility of the TPS contribution rate, driven in

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