Universities Superannuation Scheme (USS)

USS valuation 2017

The triennial valuation of the USS scheme is currently taking place. For information on the valuation and how this may affect you please read the communication sent to members (below), frequently asked questions, and visit the USS website for details. 

Latest update

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

 

Email sent to members of USS in December 2017


Dear colleagues

Update on USS

We wrote to you in October about the current review of the USS pension scheme and the difficult economic circumstances we are facing. This email is to introduce the changes that are proposed by Universities UK (UUK) representing all the employers in the scheme.

We would like to assure you that the University is committed to providing attractive pension benefits for colleagues and we appreciate that the current review of USS will be a cause of uncertainty. It is important to note that any changes implemented to the USS benefit structure would only apply to the build-up of future benefits: the pension benefits you have built up prior to any future changes in USS pension provision are protected under law.

The scheme’s current funding arrangements cannot support the cost of funding future defined pension benefits to members. Despite changes being made in 2011 and 2016, the scheme deficit has increased to approximately £7.5 billion.

UUK is proposing changes to address these funding challenges which avoid any increase in costs for individual members and ensure that money is not diverted from universities’ investment in our core activities of education and research. The proposals ensure that USS remains sustainable and secure for the long-term. The proposal is for future benefits to be delivered by a defined contributions scheme called the USS Investment Builder. Defined contribution pensions build up a pension “pot” using member contributions and employer contributions plus investment returns and tax relief. The income you might get from a defined contribution scheme at retirement depends on factors including the amount you pay in, the fund’s investment performance and the choices you make at retirement.

Universities as employers would continue the current contribution rate of 18% of salaries. If the current scheme was continued and contributions raised to stabilise the scheme, the combined contribution rate of 26% (18% from employers and 8% from scheme members) would need to increase to 37%. This would cost the University of Exeter an additional £10 million each year if all of the increase was met by employers. If the USS cost sharing arrangement for contribution increases was implemented, employee contributions would increase from 8% to 11.9%. A Lecturer (Grade F) would pay more than £110 each month in additional contributions and a Senior Lecturer (Grade G) would pay more than £130 each month.

These proposals are being discussed within the USS Joint Negotiating Committee involving employers, through UUK, and members, through University and Colleges Union (UCU). There will be full consultation with members on any proposed changes to member benefits or contributions which are agreed by the Joint Negotiating Committee. It is likely that any changes will take place in 2019 but dates are to be confirmed.

The University regrets the decision of UCU to ballot for industrial action while there are ongoing discussions about USS pension benefit reform between UUK and UCU. We have provided additional information on why change is necessary and why universities cannot afford to increase contributions on our webpages. USS members will also be invited to attend an open Q&A on the review of USS to be run jointly with UCU. We would encourage UCU members to read the information on our webpages and attend the open Q&A before casting their vote.

We are committed to supporting a scheme that is sustainable over both the short and long-term so that you, as a member of the scheme, have a full understanding of the pension benefits you are accruing during your working life. We will continue to keep you informed of developments in Weekly Bulletin, online and via email.

Jacqui Marshall
Director of People Services

Frequently Asked Questions

Read the full list of 2017 valuation Frequently Asked Questions.

See the latest UUK Update on USS Valuation for members - 11 January 2018

USS website

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

USS scheme overview

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

Email sent to members of USS in October 2017

Dear Colleagues

We are writing to you, as a member of the USS pension scheme, to provide you with an update on the review that is currently underway in relation to this scheme.

As you may be aware, every three years, a review of the national USS pension scheme takes place. This purpose of this review (Actuarial Valuation) is to ensure the total amount of pension benefits that need to be paid out to scheme members can be met and, if it cannot be met, to recommend adjustments to the scheme.

Initial findings of the 2017 valuation clearly show that current funding arrangements (employer contribution rate of 18% and employee contribution rate of 8%) will not be sufficient to support the cost of funding future benefits to people in the scheme.

Before making a decision about the funding arrangements of the scheme (2017–2020), the USS trustee has been consulting with Universities UK (UUK) – who represent higher education institutions - on the findings of the 2017 review.

Based on the findings of the current review, USS is asking if employers would be willing to materially increase their contributions above the current level of 18%. At the University, we know that increasing our level of contribution beyond 18% would be detrimental to the development of our plans, which include growing our academic community, investing in the student experience, and preserving our employment levels – this is particularly pertinent when we take into account the high level of political and economic uncertainty currently affecting the sector, not least of which is the recent announcement that home/EU tuition fees will not be subject to future inflationary increases.

We are also concerned that if USS increase the employee contribution rate, it would result in some scheme members not being able to afford these further increases, which may lead to employees opting out of the scheme altogether.

We are very disappointed that the funding arrangements and changes to benefits implemented following the last 2014 valuation have proven not to be the sustainable solution we all expected and that once again USS is having to consider further changes to either future pension benefits, the cost of funding them or a mix of both.

We recognise the importance of the pension scheme and the benefits it brings to you as a member and can assure you that both UUK and the University will carefully consider all options, and will provide feedback on these options, before any changes are proposed. We are committed to seeking an agreed outcome that is sustainable over both the short and long-term so that you, as a member of the scheme, have a full understanding of the pension benefits you are accruing during your working life.

We will keep you informed as the talks between USS, UUK and UCU (University and College Union) develop and will organise briefings for members once further details are available.

More details can be found on the USS website.