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Review of Universities Superannuation Scheme (USS)

 

Background and USS Review

USS is the pension scheme for RVC staff on grades 6-9.  Staff on Grades 1-5 are members of SAUL, and are unaffected by this review.

USS is managed by a Board of Trustees and decisions about changes to the scheme are determined by a Joint Negotiating Committee (JNC) comprised of five employers’ representatives and five representatives of the Universities & Colleges Union (UCU).  The JNC has an independent chair with a casting vote.

The scheme currently has a deficit of £17bn and two years ago the JNC set up a Joint Review Group (JRG) to agree on the best way to deal with this, and to develop a strategy to ensure USS remains a high quality pensions scheme and an important part of the total remuneration package of HE employees.

The university employers have been represented at these negotiations by the Employers Pensions Forum (EPF) which is made up of UCEA (the Universities & Colleges Employers Association), Universities UK and GuildHE.

In March 2009, the USS actuary set the JRG the following challenge:

“We would encourage the Joint Review Group to discuss changes for the long-term which will set the scheme on a secure footing for decades, rather than just for a three year valuation period, whilst at the same time reassuring members that the security of the pensions they have already built up is in no way under threat. It would be our hope that our successors in the sector will look back in 30 or 40 years time and recognise that this was an important step in securing the long-term strength and viability of the scheme.”

On the 30 April 2010 the EPF submitted its proposals to the JRG with a series of 8 appendices.

Its key points are:

  • maintenance of the 16% employers’ contribution rate but with future increases being split  50:50 between employers and employees;
  • increasing the Normal Pension Age for all active members to 65, with transitional arrangements for members currently over 55;
  • introduction of a career average revalued earnings (CARE) scheme for new employees, with existing members retaining final salary benefits;
  • an increase in the level of member contribution from 6.35% to 7.5%;
  • supporting moves to change USS’s dependence on equity investments by diversifying its portfolio so there is greater stability in the value of its assets.
 
 

The EPF proposals are seen by the employers as the minimum required to guarantee the future of the USS, but unfortunately negotiations at the JRG subsequently broke down.

The UCU then tabled its own set of counter-proposals to the JNC. These include:

  • maintenance of a final salary scheme on an open ended basis;
  • a general increase of 1% in employee contribution rates, with no increase for lower earners and a tiered increase rising to 3% according to salary;
  • a normal pension age of 65 for all new entrants;
  • flexibility around an earlier or later retirement age where members choose to work later or leave early;
  • sharing any future cost pressures on the scheme with the employee paying 35% and the employer 65%.

Note, there have been modifications to the proposals detailed above (information on the modifications can be seen in the USS Review Update section of this page).

Under the rules of USS, UCU represents all individual USS members, regardless of their trade union membership status. UCU has held a ‘consultative ballot’ on the USS Review.  This has no legal standing, and is not related to an industrial action ballot.

It is important that staff are made aware of the issues, and of developments; which is why this part of the HR website has been created.  The following documents have been posted here to provide more information:-

 

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USS Review Updates

June 2011 Update

At its meeting on the 9 June 2011 the USS trustee board confirmed the proposed changes to the USS Pension Scheme (which include the modifications to the original proposed changes) following the Joint Negotiating Committee meeting on 10 May 2011. The changes will be effective from 1 October 2011.

Further information is available here: Statement from Board of USS.

A summary document has also been created for information.

 

May 2011 Update

The USS Joint Negotiating Committee met on 10 May 2011 to give further consideration to the final form of the proposed scheme changes. The Committee agreed the proposed changes which include modifications to the original proposed changes. Further information is available here:

Statement from 10 May 2011 JNC

March 2011 Update

Unfortunately, following the meetings held in March, the USS Joint Negotiating Committee were unable to consider the proposals outlined - the statements detailing the reasons why are available here:

Statement from 2 March 2011 and 9 March 2011 JNC


For information about the reform of the USS pension scheme and the UCU dispute, please click here.


February 2011 Update

Unfortunately, following the meeting held in February, the USS Joint Negotiating Committee were unable to consider the proposals outlined - the statement detailing the reasons why are available here:

Statement from 1 February 2011 JNC


January 2011 Update

The USS trustee board met on 20 January 2011 to consider the responses from the consultation process and issued a statement following this meeting - the following is an extract of the statement (the full version can be seen by clicking here: Statement from Board of USS):

'The board has considered the responses made to the consultation, and after taking into account all of the representations received it has agreed to put forward some suggested modifications to the principal stakeholders and thereafter formally to the Joint Negotiating Committee (JNC).  The specific areas which the Board suggests are reviewed relate to  (i) the rejoining period for members who leave the final salary section and subsequently rejoin the scheme and (ii) the proposed caps on inflationary increases.'

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December 2010 Update

The consultation period ran from Wednesday 20 October 2010 to Wednesday 22 December 2010, after which the results of the consultation were discussed at the USS trustee board meeting on 20 January 2011.


July 2010 Update

The USS trustee board met on 22 July 2010 and considered the package of proposed scheme changes recommended by the USS Joint Negotiating Committee (JNC) following its meeting on 7 July 2010.

After careful consideration of the JNC’s recommendation, the trustee board agreed to implement the proposed scheme changes, subject to the completion of the statutory consultation. The consultation will run from October to December. A summary of proposed changes to the scheme can be found on the following link:

http://www.uss.co.uk/news/Pages/StatementbytheUSStrusteeboard.aspx


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Related Guidance/Documents:

HR and Finance staff are legally prevented from advising individual members of staff on the advantages and disadvantages of the proposals for them personally, but they can answer any factual questions you may have about the review.  The following websites/documents also contain useful information:-

Websites:

Documents:

 

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