USS pension valuation and suggested changes to contributions

USS pension valuation and suggested changes to contributions

Update to staff on the USS pension

Dear colleagues,

Many of our staff who are Grade 5 and above are members of the Universities Superannuation Scheme (USS) - the pension scheme provided to more than 390 UK universities and higher education research institutions.

Trustees of the USS scheme on Wednesday announced their latest valuation of the scheme which shows the existing pension deficit has risen, and the shortfall now ranges between £14.9bn and £17.9bn.

The Trustee update, shared with the Joint Negotiating Committee (JNC) - a national committee comprising Universities UK (UUK) which represents UK universities, and the University and College Union (UCU), says contributions would need to rise significantly to maintain the scheme’s existing benefits.

Currently employers pay 21.1% of salary and members pay 9.6% of salary giving a combined total of 30.7%.  

The Trustee report suggests that total contributions will need to rise sharply from 30.7% (21.1% employer contribution and 9.6% employee contribution) to between 42.1% and 56.2% of salaries to address the deficit.   

UUK today said in response to the trustee update that the suggested contributions are ‘unaffordable for employers, risk pricing even more staff out of the scheme, and undervalue the collective and enduring financial strength of the participating employers’.

The employers’ representative also said that universities and scheme members need a ‘stronger and clearer justification for the very high pricing decisions’. You can read the UUK statement here.

More details on the USS update report can be found here.

A national consultation is being planned on the future of the scheme and we will keep you updated on those as well as surrounding discussions. Independent information sessions are also being planned for University of Aberdeen scheme members and we will give you more information and those dates in due course.

Best wishes

Karl

Professor Karl Leydecker

Senior Vice-Principal

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