Proposed USS Changes
Archived updates are available via the link on the left.
USS pension scheme members will be aware from previous updates and from direct communications that there have been a series of consultations relating to the scheme valuations. The following information provides further details of the current situation.
Universities UK (UUK) represents higher education employers in discussions over the future of the USS scheme and has been negotiating with the University and College Union (UCU) over changing the scheme since January 2017 given the funding challenges it faces.
The Joint Expert Panel (JEP)
Failure to reach agreement on the 2017 valuation - led by USS - promoted the commission of a Joint Expert Panel (JEP) to independently assess the valuation. The JEP has reported its finding on the 2017 valuation; a later report is expected to consider long term solutions.
The JEP is a panel of independent experts who have been reviewing the 2017 USS valuation since May 2018. It is comprised of six actuarial and academic experts – three nominated by UUK, and three by UCU. The panel is led by a jointly agreed chair, Joanne Segars OBE (USS information on JEP).
Following the conclusion of the 2017 USS valuation, USS are consulting with UUK and employers on the 2018 valuation. This includes USS’s consideration of the report of the first JEP.
How does the 2017 valuation affect my contributions?
USS have confirmed that the 2017 valuation, which was finalised before consideration of the recommendations of phase one of the JEP, is now closed and has been submitted to the Pensions Regulator. Under the 2017 USS valuation the employer and employee contributions will increase as part of the cost sharing process set out in the scheme rules. Increases are as follows
|Effective date||Employer contribution rate||Member contribution rate||Total|
|1 April 2019||19.5%||8.8%||28.3%|
|1 October 2019||22.5%||10.4%||32.9%|
|1 April 2019 (includes allowance for 5% deficit contribution)||24.2%||11.4%||35.6%|
In addition the 1 percent employer matching contribution ended on 1 April 2019; staff can still pay in the additional 1% but this will no longer be matched.
It is hoped that a solution can be found through the 2018 valuation consultation to avoid the significant increase in employer and employee contributions in October 2019.
Scheme valuation developments
On 2 January 2019 the USS Trustee Board commenced a consultation relating to the 2018 actuarial valuation. Details are available via the UUK website.
UUK recently held a consultation on aspects of the USS 2018 Actuarial Valuation and Durham’s response is attached via the previous updates link on the left. The deadline for responses to UUK was 13 March and UUK then responded collectively to the USS Trustee Board. UUK’s response based on input from employers representing 89 percent of the USS membership can be found on the USS Employers website (link).
The USS Trustee Board met on 27 March and the Joint Negotiating Committee met on 3 April; the Trustee’s response to UUK and USS employers may be known shortly.
The Trade Union UCU had meetings of its own committees on 5 and 12 April so the UCU may develop its position following these meetings.
What happens next?
USS is expected to respond to the feedback provided by UUK following the employer consultation.
The JEP itself is continuing to meet to discuss the second phase of its work which looks at alternative approaches to future valuations and at how the governance of USS might be improved.
The 2018 valuation once concluded will result in a new schedule of contributions and recovery plan which will override the 2017 valuation versions of these documents. The timescale for completion of the 2018 valuation is by 30 June 2019.
Potentially May 2019 Formal response from the USS Trustee to the consultation
Potentially May 2019 Consultation on Recovery Plan and on Schedule of Contributions
30 June 2019 Statutory deadline for submitting the valuation to The Pensions Regulator
End July 2019 Date for finalisation of the accounting provision for USS
1 October 2019 2017 valuation contribution increases (22.5% employer, 10.4% member) implemented unless superseded by a new schedule of contributions
31 March 2021 Next actuarial valuation of USS
Where can I find out more?
You can use the links on the right to find out more from USS, UUK and UCU. Look out for direct communications from USS - a webinar was held in March so more may take place.