Sep 14 2021

In March this year, USS Trustees published a report on the pension’s funding which stated that contributions would have to rise sharply to maintain the scheme’s benefits. USS Employers and the UCU believed that the increase in contributions were unnecessary and unaffordable for both scheme members and employers. As a result, in June this year, the USS Employers proposal for the resolution of the 2020 valuation was put to the Joint Negotiating Committee (JNC) made up of representatives from USS Employers and UCU. With the casting vote of the independent Chair, the JNC has voted to propose and consult with members on these reforms. The proposal includes the USS Trustee changing some of the assumptions it used for the 2020 valuation, employers making commitments to the longer term future of the scheme (known as the employers’ covenant) and some changes to how pension would be accrued by employees. Critically, the proposal maintained a commitment to the existing hybrid scheme which includes a defined benefit element. The proposal also means that October’s planned contribution rises (as a result of the 2018 valuation) will be less than original planned. 

The table below shows the planned rises in contributions that were in place from the 2018 valuation and the contribution change that will now happen on 1 October. If the proposed benefit reform is not agreed by 28 February 2022, USS has also set out a position for completing the valuation with increasing employer and member rates.

 

Current contribution rates

(percentage of salary)

2018 valuation planned rise

(from 1 October 2021)

Contribution rises under the 2020 proposal (with further increases if future benefit reform not agreed)

Staff

9.6

11

9.8

College

21.1

23.7

21.4

 

All members of USS will be consulted on the proposal to amend future benefits this autumn in a 60 day consultation and changes would be expected from 1 April 2022. The proposal will also explore flexible options for members.

Both UUK and UCU, as members of the JNC have issued statements. You can read the statement from UUK (USS Employers) here and the UCU statement here. In response to the UCU statement, USS Employers have written to UCU to clarify if their draft proposals should be considered formal so that employers can be consulted.

Independent pension consultants, Mercer, will be holding a pension briefing for College staff ahead of the consultation on the proposal and we will publish more information on the member consultation in the newsletter and on the pension hub.