The joint negotiating committee, which includes representatives from UUK and UCU, will now be asked to decide on any changes to contribution rates or benefits that may be necessary. Cambridge University VC and other leaders have written openly to raise serious concerns and call for re-engagement. After a decade of pay and conditions being degraded, many precarious and low-paid higher education workers can no longer afford to be USS members. If the USS proposal were to be implemented, it … "Employers and their staff need significant reassurance that the USS Trustee is not being overly prudent on matters like projected investment returns or undervaluing possible covenant support measures, both of which remain under discussion.". The 2020 USS pension valuation is currently in process, and universally considered to be seriously defective. 12 January 2021. Confirmed by Forces Pension Society as 0.5% increase from 12 April 2021. The USS pension scheme has today (3 March 2021) published its latest valuation report, which sets out the increase in contributions needed to maintain benefits at current levels, and address the scheme's growing deficit. For some reason, the USS Trustee has placed considerable, and we believe wholly disproportionate, weight on this one employer leaving the scheme. Currently, contributions to the scheme are set at 9.6 per cent for members and 21.1 per cent for employers, a total of 30.7 per cent, although this was due to increase to 34.7 per cent on 1 October 2021. 1001127, A Company limited by guarantee and registered in England and Wales Company No. If you like what you're reading online, why not take advantage of our subscription and get unlimited access to all of Times Higher Education's content? It is entirely within the gift of the USS Trustee to determine that the package suggested by UUK secures a strong covenant rating as employers believe it should. This means it is vital that contributions to the scheme are affordable and sustainable for staff and employers alike and that reform is necessary,” UUK said. In spring 2021, the JNC will meet to discuss how to address the contribution rate that has been set by the USS Trustee. Someone should ask The University and College Union has repeatedly criticised the valuation approach to USS and raised concerns about the underappreciation of the strength of the employer covenant. In its middle scenario, the USS has said that the overall pension contribution rate would need to rise to 49.6% of payroll. In June USS will update their systems to produce quotes to reflect these changes. UniversitiesUK (the organisation representing VCs) has been scathing in their response to the proposed valuation. The Universities Superannuation Scheme (USS) deficit has almost doubled in recent months as a result of financial market "volatility", while unions have threatened further strike action this autumn. USS is one of the largest private pension schemes in the UK and is the principal scheme for academic and comparable staff in UK universities and other higher education and research institutions. Corresponding employer contributions increased from 18% to 19.5%, then (from 1 October) to 21.1%, with a planned increase to 23.7% planned for 2021. To date the USS Trustee has not yet provided a clear and reasoned justification for its rejection of UUK's illustrated measures, or the much higher levels of covenant support it says are needed. The scheme’s trustee board and the regulator will now “consider the appropriate response”, but one option under consideration is to bring forward an increase in contribution levels for staff and employers planned for October 2021, when contributions were set to grow to 11 per cent and 23.7 per cent, respectively. Updated with: Public service pensions increase: 2021. Jo Grady, general secretary of the UCU, said that “problems” with USS’ valuation methods and assumptions “have not been properly addressed despite widespread dissatisfaction among members and criticism from across the pensions industry and the higher education sector”. “We are somewhat dismayed the challenge is so substantive…but people will need to come together and work on this,” he said. Deferred Pension Increase Modeller Your details Calculation Date: 02/03/2021 Date of birth: Date of leaving: Section of USS: Final Salary Benefits Pension at leaving: (accrued prior to 1 October 2011) £ Pension at leaving: (accrued from 1 October 2011 to 1 October 2020) £ Pension at leaving: (accrued from 1 October 2020) £ Dates confirmed for joint talks on future of USS pension scheme. Without this justification, employers and scheme members will be concerned that the scheme is facing an unnecessary level of reform. In August, Frank Field, the chairman-elect of the House of Commons Work and Pensions Committee, wrote to USS trustees, government ministers, and the Pensions Regulator asking how it … Bill Galvin, chief executive of USS, said that this currently seemed the most likely scenario but said that the proposed commitments were “weak”. This proposal has now been shelved and a new contribution rate proposed from 1 October this year, with staff paying 9.6% of salary and employers contributing 21.1%. More university staff could be priced out of their pension scheme amid changes being put forward by the Universities Superannuation Scheme (USS), vice-chancellors and union leaders have warned. Members who pay additional voluntary pension contributions worth 1% of salary or more currently benefit from … Even more will quit if contribution rates go up further and this will endanger the health of the scheme as a whole,” Dr Grady said. jane Hutton for her thoughts - she is the whistleblower thrown off the board when she discovered misrepresented information by USS, Receive World University Rankings news first, Get job alerts, shortlist jobs and save job searches, Participate in reader discussions and post comments, Unlimited access to news, views, insights & reviews. At the close of the 2018 valuation, the USS Trustee raised concerns in relation to covenant following Trinity College Cambridge's decision to buy-out of the scheme. Spring Budget 2021: Pensions industry concerned 'wrong signal' being sent to savers; HIG Group acquires KPMG's restructuring practice; LCP aiming for net zero by 2050 with new equity strategy; UCU and UUK warn against 'unaffordable' USS pension contribution increases By Sophie Smith 3/3/2021. For their part employers need to show higher education staff that their commitment to USS is serious by working with UCU and USS on covenant support measures and to get key aspects of the [joint expert panel’s report] implemented. 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There are two rates for the Bereavement Support Payment. If UUK increased its commitments, including at least a 12-year moratorium on employer exits, the USS trustee said the overall contribution rate would need to be 42.1 per cent. "There has been a three-month delay in the USS Trustee confirming the price of current benefits, while it has had discussions with The Pensions Regulator. If this proposal is implemented, it would increase total contribution rates from 30.7% of payroll (i.e. Please turn on JavaScript and try again. Universities UK registered Charity No. “It is important that USS is designed so that people in early career can also access an affordable pension. The assumptions used by the USS Trustee in its valuation seem to seriously undervalue the collective and enduring financial strength of the university sector, which includes some of the world's leading universities. The Universities Superannuation Scheme (USS), which is the major staff pension fund for many British universities and academic institutions, announced it wants to increase … "Employers understand that the USS has a sizeable deficit and that a high number of staff on lower grades opt out because the contributions are too expensive for them. However, in a statement, UUK said that the “very high prices for current benefits put forward by the USS trustees are unaffordable for employers, risk pricing even more staff out of the scheme, and undervalue the collective and enduring financial strength of the participating employers”. According to the calculations, the best-case scenario would see future contributions increase from the current 30.7 per cent to 42.1 per cent of payroll. Universities found it “incredibly” difficult to make sense of the material presented by the pension scheme in the consultation, Universities UK (UUK) also said in its response. “USS and employers must do better. Contributions are already set to grow in October 2021 to 34.7 per cent, to 11 per cent from employees and 23.7 per cent from employers. Contributions are already set to grow to 34.7 per cent in October 2021 (11 per cent from employees and 23.7 per cent from employers). Members of USS currently pay 8% of their salary into the scheme. Employers have already gone a long way on offering covenant support; UUK's illustrated measures grant USS equal creditor status on significant secured borrowing and provide a moratorium on employers being able to exit the scheme without the USS Trustee's consent. This may all sound a long way from the challenges faced by UK universities in 2021 but it isn’t. "However, employers and scheme members need a stronger and clearer justification from the USS Trustee for the very high pricing decisions. If you claim Bereavement Support Payment, you will get a first payment following up to 18 monthly payments. 2517018, Registered Office: Woburn House, 20 Tavistock Square, London WC1H 9HQ, Increased pension costs risk pricing university staff out of USS, Coronavirus (COVID-19) - information for universities. Employer and staff pension contributions to UK higher education’s biggest pension scheme are likely to rise to 49.6 per cent of salaries, according to the latest valuation. You may be trying to access this site from a secured browser on the server. • An increase in contribution rates to 30.7% of the payroll (9.6% scheme members: 21.1% for employers) but with a “backstop” agreement that these would further rise to 34.7% (10.1% scheme members: 23.7% employers) from October 2021 in the event that the 2020 valuation did not conclude on time; It has around 330,000 members across almost 400 institutions. Commenting on the figures in the 2020 valuation report, a spokesperson for Universities UK, on behalf of 340 USS employers, said: "The very high prices for current benefits put forward by the USS Trustee are unaffordable for employers, risk pricing even more staff out of the scheme, and undervalue the collective and enduring financial strength of the participating employers. The table below outlines the changes under Pensions Plus, and reflects the increase in USS standard member and employer contribution rates on 1 October 2019 and the planned increase in contributions from 1 October 2021: Updated with 'Public service pensions increase: 2020'. The 2.5% rise was confirmed after the Office for National Statistics (ONS) revealed today that CPI inflation measured 0.5% in September. Please enable scripts and reload this page. “However, employers and scheme members need a stronger and clearer justification from the USS trustee for the very high pricing decisions. The bottom line is that members of USS and employers are going to be required to increase their contributions to the scheme from April 2019 onwards in order to secure the level of benefits in retirement they’ve been promised. SOAS UNISON members are taking strike action on 20, 21 and 24 February over changes to their pension, the Universities Superannuation Scheme (USS). Universities Superannuation Scheme (USS) is one of the largest principal private pension schemes for universities and other higher education institutions in the UK.. A valuation must be carried out at least every three years by law. employer + employer contributions) currently to … Get a month's unlimited access to THE content online. 25 February 2020. “USS chief executive Bill Galvin was awarded an eye-watering bonus last year, but USS members who have worked so hard during the pandemic are being told that either contributions have to go up or benefits must go down. The latest valuation report from the Universities Superannuation Scheme, published on 3 March, concludes that without further financial commitments from employers to strengthen the scheme’s covenant, overall contribution could even rise to 56.2 per cent. Employers are disappointed with the value that the USS Trustee has placed on UUK's illustrated covenant support package, which was developed in line with the USS Trustee's ask to mitigate risks over employers exiting the scheme, and rising levels of debt in the higher education sector. Under this scenario, salary commitments would rise to 49.6 per cent of salary, the report says. Universities UK says increases are unaffordable for employers and risk pricing even more staff out of scheme. From 1 April 2019, this will automatically rise to 8.8% of salary for all members. Increased commitments that USS wants from employers, which include prioritising USS pensions over any new debt, would mean that the scheme would be willing to take significantly more investment risk over the longer term. USS’s covenant assessment, its proposed rule change and debt monitoring arrangements, and recovery plan needed to be resolved before employers could make informed judgements about the valuation, it relayed. CPI Announced as 0.5% - Forces Pension Society This is the figure that will be used to increase all Armed Forces pensions in payment from April 2021. The Universities Superannuation Scheme (USS) is the principal pension scheme provided by universities and other higher education and associated institutions in the UK. This means it is vital that contributions to the scheme are affordable and sustainable for staff and employers alike and that reform is necessary. Many of you will have seen an email from USS about impending changes to our pension scheme.. Employers and their staff need significant reassurance that the USS trustee is not being overly prudent on matters like projected investment returns or undervaluing possible covenant support measures, both of which remain under discussion.”. The USS Trustee has a regulatory duty to file the 2020 valuation with The Pensions Regulator by 30 June 2021. The USS Trustee has now set out higher prices than it previously thought necessary and it appears to be taking a more cautious approach than employers and our actuaries advise is needed. Universities UK, which represents 340 USS employers, has indicated a range of commitments to USS, including a six-year moratorium on employer exits from the scheme.

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