21st July 2022 Academy Trust and Local Government Pension Update

The Department for Education (DfE) has made a written ministerial statement confirming an extension of the guarantee that the closure of an academy trust will not lead to any outstanding LGPS liabilities reverting to the fund. This guarantee was first made in 2013 and now includes a new increased annual ceiling of £20m. The Guarantee provides academy trusts with direct Government backing for certain pension costs. The DfE has asked administering authorities to ensure that this is reflected in this year’s scheme valuation, both in the setting of employer contribution rates and the length of deficit recovery periods. A Parliamentary Minute which sets out the detail of the Guarantee, has been laid in both Houses.