REJECT The Government recognises the cost pressures associated with TPS participation and also recognises that defined benefit pension schemes are highly valued by staff. This Government made a commitment as part of the Post-16 Education and Skills White Paper to better understand concerns within the post 1992 higher education sector about pension provision, while recognising that defined benefit pensions are a valued part of staff remuneration. The Government notes calls from the Universities and Colleges Employers Association and University and College Union to review the SCAPE discount rate methodology. We recognise that the valuation methodology causes significant volatility in the employer contribution rate and raises concerns in relation to long term affordability for HE providers. However, HM Treasury set the valuation methodology for public sector pension schemes, including the TPS, to balance contributions with pension provision. His Majesty’s Treasury has confirmed, however, that from April 2027 the employer contribution rate for the Teachers’ Pension Scheme will reduce from 28.68% to 17.5%, with the new rate fixed for four years. This represents a positive outcome for higher education providers participating in the scheme, providing greater financial certainty and helping to ease cost pressures. The Government does not consider additional financial support for higher education providers in England to be appropriate. Universities are independent from Government and so they operate under a different funding model from schools and further education colleges and are expected to manage these costs within that context. The Government recognises the financial pressures associated with the TPS and understands that a number of universities are adopting subsidiary models to reduce costs. Whilst higher education providers, as independent organisations, may choose to pursue such arrangements operating within the framework of existing employment and pensions legislation, the Government expects providers to engage constructively with their workforce and take staff views into account when considering any changes that may affect them. Furthermore, given the significant reduction in the TPS employer contribution rate from April 2027 we expect the financial pressures associated with scheme participation to ease, meaning fewer providers should be considering measures such as subsidiary models in response to pension costs.