The Universities Superannuation Scheme: Seven things to know
18 Mar 2021
Read the key issues at the heart of pension negotiations ahead of the University’s open meeting on Wednesday, 24 March
There will be a lot of news about the USS pension in 2021 as negotiations take place on the latest valuation and contributions for staff and employers. Ultimately this will affect how much members pay each month and the financial position of our University.
Universities UK negotiates on behalf of 340 employers including our University. Here are some of the key issues at the heart of the negotiations.
- The current scheme is not sustainable: Rising life expectancy and low interest rates have made pension schemes more expensive to run and COVID-19 has made this worse. Falling levels of student funding over recent years, taking account of inflation, and rising staff costs have not helped university finances.
- The cost is putting off some members: Around 20% of staff across all USS employers now opt-out of USS, particularly those early in their career. USS has a flat rate of contribution for every member – 9.6% of salary.
- Flexible options are needed: Flexible options are needed so members can pay in less but still benefit from employer contributions and save for the future. This reflects the different pressures of staff at different times in their lives.
- The increased cost is affecting University finances: There has been a 50% increase in the level of employer contributions to USS over the last decade (14% in 2009 to 21.1% from 2019). At our University this amounts to £77,147,000. This is money that can’t be spent on teaching or the student experience.
- Our University wants to safeguard staff benefits: Pensions, and their additional benefits such as death in service and disability payments, are a significant part of our package for staff and we recognise their importance. This means we need to work with all parties to deliver a pension that is valuable, affordable and sustainable to employees and employers.
- Doing nothing isn’t an option: USS can impose much higher contributions without the agreement of employers and the union.
- Your pension to-date is safe: We want to reassure you that your USS pensions built-up to date are secure, and that by working together we can tackle the scheme’s challenges to create valuable, affordable, and sustainable pensions for all staff.
We will continue to keep you up to date with the latest developments and announcements.
Please take opportunities to ask questions at University open meetings. The next one is on Wednesday, 24 March, from 12.45pm – 2pm, and includes a presentation by external pensions expert, Paul Hamilton.