In this section
Academies
Process of Conversion
An academy is automatically a scheme employer in the LGPS upon conversion. This means that all non-teaching staff employed by an Academy Trust upon conversion, and any new members of staff who are employed post-conversion, are entitled to membership of the LGPS.
LGPS Regulation 2013 Definition
A proprietor of an academy within the meaning of section 579 (general interpretation) of the Education Act 1996 who has entered into academy arrangement within the meaning of section 1 (academy arrangements) of the Academies Act 2010.
We need the following information to process a school converting to academy status:
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Date of proposed conversion
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Data file of all non teaching staff
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Confirmation on whether the academy will be joining an academy trust or becoming an employer in their own right
We will require you to complete the following:
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Academy Conversion Template
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Academy Staffing Template
If you'd like more information on becoming an academy in the LGPS, the following fact sheet is available: LGABrochure.pdf
Schools thinking about academy status should also read our Pension Administration Strategy before conversion. It describes the responsibilities of the Fund and our employers.
Microsoft Word - Pensions Administration Strategy
Please contact pensionsemployer@cheshirewestandchester.gov.uk for more information
Academy Status
Financial implications
On conversion to academy status an actuarial assessment will take place. This is based on the membership profile of your employees. The information you provide for the members in the Academy Admission Statement will be used to ensure complete and accurate data is provided to the actuary for the assessment.
If you are forming, or joining, a Multi Academy Trust, each academy will be set up and the pension position tracked on an individual basis. This is so any future changes within the Multi Academy Trust for example schools closing, or joining or leaving the trust will not have an impact on your individual school. It may also be necessary for the ‘head office’ of the trust to be set up as a separate employer in the pension fund.
As a standalone employer you will inherit pension scheme liabilities based on the membership profile of your employees and the current funding level of your Local Authority and the academy will become responsible for funding these liabilities.
The levels of assets that are notionally transferred are calculated based on the funding level of your Local Authority at the date of conversion.
Contribution rates
The actuary will calculate a standalone employer contribution rate for your academy.
This individual rate could be higher or lower than the Local Authority rate due a number of reasons, demographic profiles of staff, size of payroll relative to pension liabilities, funding position at date of transfer etc.
If this individual academy rate is higher/ lower than the Local Authority rate, the contributions in the first financial year after conversion will remain the same as the Local Authority rate. But will change to your individual rate from 1 April the following year.
Alternatively, if all the academies within the Multi Academy Trust pay a combined contribution rate, you will pay the Multi Academy Trust rate from the date of conversion.
All employers contribution rates are reviewed every three years as part of the formal triennial valuation
Employer responsibilities
As a standalone employer in the pension fund you have responsibilities as laid out in the scheme regulations. Adherence to these responsibilities will enable Cheshire Pension Fund to effectively administer the pension scheme.
More information is available here:
Area
Key Responsibilities
Membership
Offer LGPS to all eligible non‑teaching staff; manage opt‑outs / re‑enrolment.
Contributions
Deduct correct rates; submit contributions and remittances by the 22nd monthly.
Data Management
Notify changes, starters, leavers, pay details.
Retirements
Manage redundancy, ill health, flexible retirement following regulations.
Funding
Meet deficits and comply with actuarial valuation requirements.
Governance
Maintain employer policies and engage with the administering fund.
TUPE and Outsourcing
LGPS and Academies
The Local Government Pension Scheme (LGPS) is a public sector pension that guarantees members a set level of benefits when they retire, based on their pay and how long they have paid in. It is funded by employee contributions, employer contributions, and investment returns, and is protected by law.
When a school becomes an academy, the academy trust automatically becomes an LGPS employer. This means all eligible non‑teaching staff must be offered membership of the LGPS for as long as they work for the trust.
DfE LGPS Guarantee
Since July 2013, the Department for Education (DfE) has provided a guarantee to pension funds. This ensures academies are not treated as high‑risk employers and are treated the same as maintained schools. If an academy trust closes, any remaining LGPS liabilities will not fall back on the pension fund.
What outsourcing means
Outsourcing is when an academy trust contracts an external company to provide services such as catering or cleaning.
Outsourcing and the LGPS
When staff who are eligible for the LGPS move to an external contractor under TUPE, the DfE guarantee continues to protect their pension benefits.
Cheshire Pension Fund’s default position is to use pass‑through arrangements. This allows staff to remain in the LGPS while working for the contractor, with the academy trust keeping responsibility for the pension liabilities. These liabilities are covered by the DfE guarantee.
What is a pass‑through arrangement?
A pass‑through arrangement is a contract between the academy trust and the contractor that sets out how pension costs are shared.
Although the trust keeps overall responsibility for pension liabilities, the contractor pays the ongoing monthly contributions which are set for the duration of the contract and also any costs, such as admission, redundancy‑related early retirement costs or pay increases. There is no contract exit debt.
Who is covered by the DfE guarantee?
The guarantee covers:
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Academy trust employees who transfer to a contractor under outsourcing arrangements
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Staff who transferred from a local authority to a contractor before academy conversion and whose contract moved to the academy trust
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Local authority staff who transfer to a contractor when services provided to the academy are outsourced
What academy trusts need to do
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Contact the Cheshire Pension Fund at the start of any outsourcing process involving TUPE and LGPS‑eligible staff
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ESFA approval is not required for pass‑through arrangements if the situation fits one of the covered scenarios
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If the arrangement is not covered, the trust must contact ESFA via the customer help portal
Key points to remember
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Contact the Cheshire Pension Fund at the start of any outsourcing process
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Most standard outsourcing arrangements do not require ESFA approval
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Existing qualifying contracts are automatically novated to the academy
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If the contractor fails, LGPS liabilities stay with the academy trust
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Pension funds may not require bonds; if they do, the contractor must provide them
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Pension funds do not need proof of ESFA approval if the policy conditions are met
