USS updates

2017 Valuation of USS

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 web site