Potential reform of the Universities Superannuation Scheme
This page offers information about the important discussions taking place on how best to ensure the future sustainability of the USS pension scheme.
A valuation of the USS pension scheme in early 2017 showed a significant funding deficit of £7.5billion and an increase in cost of future pensions. Possible ways now being explored of addressing this include increasing contributions to the scheme or changing the benefits. Currently, employers pay 18 per cent of salaries towards USS and employees pay 8 per cent, which is a significant cost both to those of you who are USS members and to the university.
USS funding is a national issue and as an employer, Queen Mary works through Universities UK (UUK) to negotiate any changes. UUK consulted with all universities earlier this year, and in our response we said we did not feel that increasing either employee or employer contributions would be affordable, and that we would prefer that some level of defined benefit for members was maintained.
UUK has now made a proposal to the Joint Negotiating Committee (JNC), which is the committee through which any changes to member benefits have to be agreed. The JNC is made up of equal numbers from the employer representation Universities UK (UUK) and from the member represented body University and College Union (UCU), together with an independent chair.
UUK’s proposal is to move to defined contribution saving (through the USS Investment Builder) for all employees, on all salary. However, the proposal has been constructed in order to offer a range of options (including the possible reintroduction of defined benefits) if the scheme’s funding situation improves at future valuations.
Please note that members’ accrued pensions (those built up prior to any future changes in USS pension provision) are protected under law and will not be affected by any future change. In addition, any proposed changes to future benefits or contributions will be subject to full consultation with all affected employees.
An original deadline of 30 November 2017 set by the USS trustees for the UUK and UCU negotiations was extended to 18 December 2017. Following these negotiations through the JNC and consultation with USS employees in spring 2018, USS will need to report to the Pensions Regulator about the proposed measures by 30 June 2018.
Notification of ballot by University and College Union (UCU)
UCU has not as yet put forward an alternative proposal, but we were served notice on 22 November 2017 of a ballot for local industrial action relating to the “proposed detrimental changes to USS and a failure to agree a collective agreement protecting pension benefits”. We remain hopeful that national negotiations will reach an agreement and industrial action will be avoided. If not, we will ensure measures are in place to minimise the impact on our students, whose education and future prospects are of paramount concern to us, whilst respecting the rights of staff to support any industrial action if they wish to do so.
Some additional information related to the background and current developments is available in the documents below for those who may have questions about the USS valuation process or who seek further information about what the proposals may mean in practical terms. We will keep you updated on further information about USS as developments occur.