DfE Local Government Pension Scheme guarantee for academy trusts

October 2022

The DfE has published a parliamentary minute detailing the DfE Local Government Pension Scheme (LGPS) guarantee.

The DfE provides the guarantee for LGPS cessation liabilities in the event of an academy trust closure. By providing the guarantee, the DfE expects that administering authorities (LGPS pensions funds) will treat academies at the same risk level as local authority maintained schools. This will ensure that there is no significant divergence in employer contribution rates or deficit recovery periods from maintained school.

There is no end date for the guarantee, but the DfE will assess it at regular intervals to determine it remains affordable and to review the set annual ceiling limit.

From April 2021, the set annual limit is £20 million per annum. The DfE’s full policy paper can be found here.