Middlesex University


Financial Statements 2016/17


29. Pension Schemes


The University’s employees belong to two principal pension schemes, the Teachers’ Pension Scheme (TPS) for most academic staff and the Local Government Pension Scheme (LGPS) for all other staff. The schemes are defined benefit schemes providing benefits based on career average design. Benefits accrued prior to the schemes transitions to career average arrangements are protected providing benefits based on a final pensionable salary. The University’s pension service costs and contributions for the year in respect of these two schemes was £14,648k (2016: £13,357k)


Teachers’ Pension Scheme


The Teachers’ Pension Scheme (TPS) is operated by the Department for Education (DfE) and is governed by statutory regulations. Under the definitions set out in Financial Reporting Standard 102 (FRS102), the TPS is a multi-employer pension scheme. As the TPS is underwritten by central government and the University has no future obligation to make contributions to the scheme, this is effectively a defined contribution scheme in so far as it affects the University. As a result, contributions to this scheme are accounted for as if the scheme was a defined contribution scheme.


The TPS is a statutory, contributory, unfunded, defined benefit scheme. The regulations under which the TPS operates are the Teachers’ Pensions Regulations 1997, as amended. Contributions are credited to the Exchequer on a “pay as you go” basis under arrangements governed by the Superannuation Act 1972. A notional asset value is ascribed to the Scheme for the purposes of determining contribution rates.


The University has set out below the information available on the Scheme and the implications for the University in terms of the anticipated contribution rates.


The employer’s contribution rates set by the schemes actuary and approved by the DfE for the University’s academic staff were from 1 September 2015 (to 31 March 2019) 16.48% of pensionable salaries.


The scheme is subject to a full actuarial valuation every four years with the most recent funding valuation carried out as at 31 March 2012. The funding valuation report was published by the DfE on 9 June 2014. The key highlights from this report are as follows:


Funding position


Aggregate value of liabilities Aggregate value of assets Total (shortfall)


At 31 March 2012 £bn


191.5 176.6 (14.9)


Total Scheme liabilities for service to the effective date are £191.5bn and notional assets of £176.6bn giving notional past service deficit of £14.9bn.


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