The Joint Negotiating Committee of the USS decided on 23 January to take forward proposals to change the benefit structure of USS.
An earlier version of this message was sent from the Chief Financial Officer to all USS members at the University on 24 January 2018. The following has been updated to clarify information relating to the total employer contribution rate.
The proposed changes to the benefits offered by USS are as follows:
- The salary threshold for defined benefits (DB) is reduced to zero, making USS a purely defined contribution (DC) scheme for the forthcoming valuation period
- The option to re-introduce the DB structure in future remains
- The total employer contribution rate of 18 per cent of salary to remain. Currently the employer pays into the USS Investment Builder on pay in excess of the salary threshold, currently £55,550 at a rate of 12 per cent. Under the proposal this would increase to 13.25 per cent of total pay, subject to consultation with the USS trustee on the level of deficit recovery contributions
- The standard employee contribution to remain at 8 per cent of salary, but with an additional option available to staff to pay at a reduced rate of 4 per cent while still benefiting from the full employer contribution
- Existing ill health and death benefits to remain
- Investment charges for underlying funds (provided via the USS Investment Builder) to be fully subsidised by employers.
It is important to realise that these changes would only affect USS benefits earned after the future implementation date, which is expected to be April 2019. Accrued pension benefits are protected by law.
A more detailed outline of these proposals is available to download here. Important background information about the 2017/18 valuation is available on the UUK website.
The University understands that many members of USS will be concerned about these proposed changes and it is committed to communicating regularly with affected staff over the coming weeks and months.
There will now be a national employee consultation on the proposed changes that we expect to start towards the end of March. The University will run roadshows across a number of geographical sites – at least one of which will be recorded and made available online for people to view. Details of these will be emailed to staff in the coming weeks, and information will also be made available on the staff pages of the University website.
Information will also be provided to all members of USS, and those employees who are eligible to join USS, giving details of how they can provide feedback on the proposals.
Further information:
On the proposed changes:
https://www.staff.admin.cam.ac.uk/system/files/download/statement_on_benefit_reform_for_employees.pdf
UUK background information to the 2017/18 valuation:
http://www.universitiesuk.ac.uk/policy-and-analysis/Pages/pensions.aspx
University of Cambridge statement on the USS valuation, including links to UCU information:
https://www.staff.admin.cam.ac.uk/general-news/uss-pension-valuation
USS Investment Builder:
https://www.uss.co.uk/members/members-home/the-uss-scheme/uss-investment-builder
Information on types of pension schemes:
https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics