Academies and Local Government Pension Scheme
(LGPS) liabilities: parliamentary minute
Provision of a DfE guarantee that the Department will meet any outstanding Local
Government Pension Scheme liabilities on Academy Trust closure
1. It is normal practice, when a government department proposes to undertake a contingent liability in excess of £250,000 for which there is no specific statutory authority, for the department concerned to present to Parliament a Minute giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until fourteen parliamentary sitting days after the issue of the Minute, except in cases of special urgency.

Background
2. Under the Local Government Pension Scheme (LGPS) Regulations 2008 an academy proprietor
(i.e. the company which runs the academy and called an “Academy Trust”) is required to offer all of its non-teaching staff membership of the LGPS. In England the scheme is managed locally in 79 different Administering Authorities.
3. Some academies are experiencing significantly higher LGPS employer contribution rates to those set when they were a local authority maintained school. The main reason for this is because academies are not funded through the local authority which previously gave assurance to the
Administering Authority that LGPS costs would be met in the long term. We are seeking to regain parity for academies with the maintained school sector regarding the risks that they present to the pension fund in the event of the closure of an Academy Trust, and to encourage equitability of treatment. 4. We are providing a guarantee to LGPS Administering Authorities that in the event of the closure of an Academy Trust any outstanding LGPS liabilities will not revert to the fund. Providing such assurances will give Administering Authorities the confidence