September 2018 cost-sharing consultation

Frequently Asked Questions

The trustee wish to complete the current valuation process to fulfill their obligations under the scheme rules and with the pensions regulator, so have taken steps to do this. Any change to benefits or contributions can only be made once a formal consultation with members has been made and member responses have been considered.

The consultation is about the trustees implementing the scheme rules, which provide for the ‘cost sharing’ process (Rule 76.4-8) to take effect.

Under cost sharing, any increase to the contribution rate required is split 35:65 between members and employers respectively.

A dedicated USS consultation webpage will launch on Monday 4 September.

There are no changes to USS core benefits at this time. The only benefit change is the proposed withdrawal of the 1% match. There is a proposal to increase contributions from members. However following consideration of the JEP report, further changes to benefits and/or contributions may be proposed. If this is the case then these will be subject to a separate consultation in the future.

The JNC is responsible for deciding on changes to benefits and employee contributions to the scheme. If the JNC proposes benefit reform or changes to employee contributions there will be a statutory consultation between employers and affected staff.

For the Consultation that commences in September 2018 all current active member of USS and those eligible to join but are not yet active members will receive a consultation pack from USS. This will contain details of the dates of the consultation period and how to register your views.

Once have received a pack giving details of what the consultation is about and how to make your views known, you have 60 days from Monday 4 September to go online to the specified consultation page to give your views.

Further information is also available on the USS website.

The cost sharing process will run in parallel with the work of the JEP and the implementation of any subsequent JNC decision. USS Ltd, as the trustee, has a statutory obligation to complete the 2017 valuation and the initial deadline for doing so passed on 30 June 2018. The Pensions Regulator has advised the trustee that they are expected to present a credible plan for completing the valuation as soon as reasonably possible, so the USS trustee has taken the decision that they are unable to wait for the JEP to give their report and will invoke rule 76.4 ( cost sharing) to take effect from 1 April 2019.

The JEP is expected to produce a report to UCU and UUK in September 2018, which is expected to inform subsequent JNC discussions in autumn/winter. Any changes to benefits and/or contributions arising from a JNC decision would be implemented by USS as soon as practically possible, but would most likely take up to 12 months to introduce. This would be well beyond 1 April 2019, which is the timescale required to complete the current valuation under the cost sharing process.