Proposed changes to future USS benefits
06 Feb 2018
Update for colleagues
As you may be aware, there have been discussions around potential changes to the Universities Superannuation Scheme’s (USS’s) future benefit structure as a result of the latest valuation.
Pension funds like the USS, which offer an element of defined benefit pension, have come under increasing financial pressure with both deficits and the cost of future service increasing significantly, in spite of increased contribution rates by employers and employees.
If you are a member of USS we have kept you informed of progress on the valuation via regular emails, with the most recent communication being issued today from the USS Trustee (Monday, 5 February).
Our University is one of over 350 employers which make up the USS and around 6,300 of our staff are currently members of the Scheme.
Any proposed changes to the USS are negotiated nationally by the Joint Negotiating Committee (JNC) which is made up equally of Universities UK and University and College Union (UCU) representatives with an independent chair. The University is not able to negotiate USS pension provision independently.
Over the past year employer representatives (UUK) and Scheme member representatives (UCU) have met more than 35 times to discuss USS’s challenging funding position. All parties recognise that making changes to the scheme will cause uncertainty and concern for USS members.
UUK consulted with employers who confirmed that further increases in contributions would necessitate significant budget cuts, potential job losses and the diversion of funding away from employers’ core missions that would be unjustifiable to students or other funders of higher education and research. UUK and the UCU both made proposals to the JNC which were put to a vote and UUK’s proposal was carried by the JNC.
The proposal supported by the JNC does not end all defined benefits - defined benefits continue for life assurance and disability benefits and employers have committed to consider in three years’ time if defined benefits can be re-introduced should the Scheme’s funding conditions improve. UUK has offered to work with the UCU in the interim to define what improvements in funding conditions would be necessary.
Employers remain committed to supporting the USS and have confirmed they will maintain their 18% contribution for the next six years, over two valuations, through to 2023.
The proposed changes are subject to a statutory consultation with all active USS members who are currently paying into their pension, employees eligible to join USS and elected representatives; this consultation will begin in mid-March 2018. If accepted, the changes would come into effect no sooner than 1 April 2019 and would apply only to any benefits built up from this date.
Karen Heaton, Director of Human Resources