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Pensions – what you need to know regarding USS

21 Feb 2019

Important information regarding the Universities Superannuation Scheme (USS)

If you’re part of the Universities Superannuation Scheme (USS) there will be changes to your pension contributions from 1 April 2019. 

This is the first of three planned increases following a consultation on the 2017 valuation of the USS pension which has now concluded.

If you want to know how these changes could potentially affect your salary directly, here are some clear and easy to follow examples that show the possible financial impact on your take home pay. 

At present, the next two increases to contributions after April 2019 will happen on Thursday, 1 October 2019 and Wednesday, 1 April 2020. 

A new consultation (between the USS and employers) on the 2018 valuation of the pension began in January this year and will end on Friday, 15 March. This consultation includes “updated Technical Provisions” which, simply put, are the contribution levels required to fund the benefits of the pension scheme and the level of risk employers are willing to take to secure them. 

According to the USS trustees the required contribution rate that will emerge from the 2018 valuation depends on how “much more optimistic the scheme's assumptions can be about the future returns from its investments, and how any more optimistic assumptions can be tangibly supported by the scheme's sponsors.”

The USS is consulting with employers, including The University of Manchester, to assess the level of risk we, as employers, are able to accept. This could potentially find “an alternative way forward” to the cost-sharing outlined above, though this cannot be guaranteed. Therefore, if there is a deficit, the only feasible way it can be countered is through higher contributions, additional risk or a change in benefits or some combination of these.

The USS board of trustees, along with The Pensions Regulator (TPR), primary duty is to ensure the defined pension benefits offered to members are secure and can be paid when due.

If you have any questions about the issues raised in this piece you can check out the Q&A from USS. You can also see their latest update on why the USS is changing