You may recall from earlier messages that changes lie ahead for the Universities Superannuation Scheme (USS) pension scheme that will impact on all staff who are currently members of the scheme. In addition, the changes may impact on decision making for those eligible to join the scheme who have chosen not to do so.
Put simply, the USS scheme has had a valuation and the USS Trustee - which runs the scheme - has indicated that there is a deficit of between £14.9bn and £17.9bn. As a result, the Trustee wants more money in salary contributions from employers and employees to keep pensions at the same level. See our first message here.
A reminder can be found here of the shared concerns of the University and the Aberdeen University and College Union (UCU) that changes proposed are unaffordable to employees and employers.
Across the sector, universities cannot afford a higher contribution rate without diverting money from other budgets, with potential consequences for jobs, teaching, and the student experience, and many staff cannot afford to pay in more themselves.
USS is a one-size-fits-all scheme with all scheme members having to pay the same amount – currently 9.6% of their salary, irrespective of how much they earn. This has led to one in five staff dropping out of the scheme, put off by the high contribution rate. It is also understood that this may have contributed to individuals not joining the scheme at the outset of their employment due to the high costs. Currently the employer pays 21.2% contribution.
Now Universities UK (UUK) – which represents the employers: the 340 plus UK universities and higher education research institutions that belong to the scheme – has launched a national consultation to hear thoughts on tackling the scheme’s increasing costs, sizeable deficit and high opt-out rate.
UUK is proposing alternative measures to reduce the costs proposed by USS and give scheme members the best possible level of benefits for more affordable contributions than those being proposed by the USS Trustee.
See more detail about the UUK consultation plus FAQs here.
Information gathered through the consultation will support and inform continued engagement with the USS Trustee and the UCU. The first step in the consultation process will be an open session for all of our USS eligible staff, which will be held on Thursday 22 April at 11am via MS Teams. More details on this and on how to join will be sent out shortly.
At our session, we will set out the current issues with the scheme and outline alternatives for discussion. The meeting will be chaired by Principal and Vice-Chancellor Professor George Boyne and supported by pension specialists Mercer and members of the Senior Management Team.
If you are a USS member or are eligible to join USS, we really want to hear from you so we can feed into the consultation which runs until 5pm on Monday 24 May. During the week of 26 April we will be issuing a short survey that UUK have provided as one method of seeking your feedback. A further communication will be issued to launch the survey, which will run for three weeks.
Professor Karl Leydecker