Universities Superannuation Scheme (USS)

Latest update

There is a full list of communications about USS online.  You can have your say about the cost-sharing proposal online

Our response to the UUK consultation on the JEP report 

The University’s draft response to JEP report was amended in light of comments received from colleagues and following the October Council meeting. 63 colleagues gave their opinions in our internal consultation.  Here is the response submitted:

1. Would your institution support the JEP recommendations regarding the 2017 valuation in overall terms, subject to the acceptance of such a position from the USS Trustee (and TPR as appropriate)?

The University strongly supports the JEP recommendations in relation to the 2017 valuation. We support the changes with respect to risk, allowing for outperformance to bring back deficit contributions to 2.1%, smoothing and adopting the latest mortality tables.

The University’s support is based on the acceptance of the recommendations by the USS Trustee, UCU and The Pensions Regulator.

Feedback from the University community when consulting on our response was that the work of the JEP and understanding of the detail of the Report needs further communication to scheme members to address concerns around the deficit calculations. 

2.  What further information would you need to provide a final view for question 1?

The University’s response is provided above, however we have some practical concerns about the use of contingent assets. It would be useful to see some probability scenarios with respect to the calling in of any contingent contributions that may be triggered if this or a similar mechanism is required.

The consultation also suggests contingent assets might form part of the solution but we are not clear how this could work in a multi-employer scheme with different quality assets, financial capacities and the variety of bank loan/external finance restrictions in the sector. The cost of organising sector wide contingent assets, involving valuations and legal charges, is also likely to be considerable. More information on the practicalities of this idea would be useful. 

3. Employers currently pay 18% toward the USS scheme, and the mandate agreed immediately following the ACAS discussion was 19.3%.  If the recommendation of the JEP were accepted in full by all parties, the outcome would be that existing benefits – minus the employer match of 1% - could be provided at an indicative employer contribution of 20.1% of salary (with a member contribution of 9.1%).

(a)   Would you accept employer contributions at that level?

(b)   If not, what balance of additional risk, higher contributions and/or benefit change would you prefer to see as an outcome?

(a)   Yes, the University would be willing to increase its contribution rate to 20.1% (along with an employee contribution rate of 9.1%), if necessary. However, this will represent a significant increase in employee contributions and the University is very concerned that some members of staff may find this unaffordable, which may lead them to withdraw from the scheme. The future welfare of our staff is of paramount importance and not having an affordable and sustainable pension scheme for the sector in the longer term would not be an acceptable outcome for us. This will be an additional cost pressure and will lead to changes to our budget and investment priorities and plans, requiring offsetting savings from other areas of our operations. We remain concerned about the future of the long-term scheme and would want an explicit recognition that the conclusion of the valuation on this basis still leaves the challenge of finding a sustainable solution.

 

Key points

Summary of changes to USS

1. USS is a national pension scheme for academic and senior professional services staff in pre-1992 Universities. The scheme is managed by an independent trustee board in accordance with the requirements of pensions legislation and the Pensions Regulator and in consultation with Universities UK (representing employers) and the University and College Union (representing scheme members).

2. Despite changes to the scheme in 2011 and 2016 to address significant funding challenges, the deficit is expected to increase from £5.3 billion (at the March 2014 valuation) to £7.5 billion at March 2017. 

3. Universities believe changes are necessary to address USS’ significant funding challenges and put the scheme on a sustainable footing for the long-term, while continuing to offer attractive pensions to staff, now and in the future, and ensuring that contributions remain affordable to both staff and employers.

4. Over the last year, there have been more than 45 meetings at national level between UUK and UCU to discuss these funding challenges. 

5. A Joint Expert Panel, with panel members nominated in equal numbers by Universities UK and UCU, will be formed to review the basis of, and agree key principles for, the valuation of USS. To allow their work to happen, there will be no change to the current contributions or pension benefits of USS until at least April 2019.

6. Any changes will only affect benefits earned after the implementation date, as benefits already accrued are protected by law and cannot be changed retrospectively.

Frequently Asked Questions

Read the list of Frequently Asked Questions about changes to USS including explanations of terminology - these were updated in August 2018. 

A new set of FAQs relating to September 2018’s cost-sharing consultation is here

If your question relates to industrial action please go to industrial action.

USS scheme: current overview

The information below summarises the current benefit arrangements for members of the Universities Superannuation Scheme – commonly known as USS. These are expected to change from April 2019. 

Staff on Grades E and above are eligible to join the Universities Superannuation Scheme – commonly known as USS.

The Contract of Employment you will be offered before you join the University of Exeter will contain brief details regarding your pension scheme. Importantly, your contract will inform that you will automatically be put into the pension scheme unless you opt not to join. If you do not wish to be a member of the pension scheme, you must contact the Payroll and HR Administration Office in People Services immediately for a USS “Opt Out” form to prevent any deductions being made from your salary. The form will need to be completed and returned to the Pay and Benefits Office before the cut off day for payroll.

New to USS

If you are about to join, or have just joined, there are a some things you should think about straight away:

  • Complete the death benefit nomination forms
  • Expression of Wish – Everyone should complete this to let USS know where any lump sum should be paid in the event of your death.
  • Registration of Potential dependant – Only complete this form if you are not married nor part of a civil partnership. This form is used to notify USS of a financial dependant who might qualify to receive the equivalent of the spouse’s pension on your death.
  • Been in USS before – if you have previous membership of USS please let us know, especially if you have just joined us from another institution. This way we can make sure that your USS records are maintained and ensure that the correct rate of employee contribution are taken from your pay. It is especially important if you were paying Additional Voluntary Contributions at your previous post as these will need to be carried on being deducted from your pay at this institution.

Information on the benefits provided by USS including information for members, prospective members as well as deferred and retired members and any forms that are required can be found on the USS website

Pension input period for USS

USS have issued an announcement to scheme members regarding the pension input period for the purpose of calculating the Annual Allowance for tax purposes - see the USS website

Opting out of the scheme whilst remaining in employment

Whilst the scheme gives automatic membership, you do not have to take this up and can choose to opt out of the scheme at any time. The options upon leaving the scheme this way are the same as those if you left the employment of the University.

You can of course choose to opt back in, subject to conditions.

Further information

Equality Assessment

The University has conducted a USS Consultation 2018 Equality Assessment

September 2018 consultation: Information Seminars

During the consultation period information sessions for members and other colleagues will be run, hosted by Andrew Connolly, Chief Financial Officer. There will be plenty of time for questions. 

Date Time Location
6/9/18 12.00-13.00 Newman Collaborative Lecture Theatre C/D, Peter Chalk Centre, Streatham Campus
  12.00-13.00 Peter Lanyon 03, Penryn Campus (via video link)
  15.00-16.00 South Cloisters 3.06, St Luke's Campus
13/9/18 14.00-15.00 Streatham Court B, Streatham Campus
     
3/10/18 13.00-14.00 Harrison 101, Streatham Campus
10/10/18 12.30-13.30 Harrison 103, Streatham Campus
12/10/18 13.00-14.00 Exchange Red, Penryn Campus
12/10/18 13.45-14.45 G1, Knowledge Spa, Truro Campus
15/10/18 13.00-14.00 Newman Collaborative, Peter Chalk Centre, Streatham Campus
29/10/18 13.00-14.00 North Cloisters 12, St Luke's Campus 

You can watch a recording of the 3/10/18 session online. 

 

Previous staff communications

 


Q&A session on proposed changes to the USS pension

Andrew Connolly, Chief Financial Officer, University of Exeter, along with Dr Barrie Cooper, Joint President of the University of Exeter Branch of UCU, answered questions on Tuesday 9 January.  Colleagues can watch a recording(sign-on required). Colleagues can also sign in to view the USS slides from Barrie on behalf of the UCU and USS presentation from Andrew representing the University as employer. A written summary of questions and answers can be seen here: USS Q&A 09.01.2018.  


 

USS website

The consultation website containing more information, and a chance to have your say can be found here https://www.ussconsultation2018.co.uk/members 

Full information for USS members regarding the 2017 valuation can be found on the USS website.