Members of staff will probably be aware that there are a number of possible changes to the pension schemes. The University will inform staff of the implications for the schemes as these become clear. The three main issues in the coming months will be:
1. A consultation will begin on changes to the USS rules (see http://www.uss.co.uk/news/Pages/StatementbytheUSStrusteeboard.aspx for details of proposed changes)
2. The government is currently consulting on its ideas for changes to tax relief for pension contributions (see http://www.hm-treasury.gov.uk/consult_pensionsrelief.htm). These changes could create significant increases in tax for staff with long membership of schemes, particularly if staff see a rise in salary on promotion (for example from Senior Lecturer/Reader to Professor). The University has responded to the consultation questioning the way that the ideas seem to discriminate heavily against schemes based on final salary (defined benefit schemes).
3. The government is also discussing the use of the Consumer Price Index (CPI) rather than the Retail Price Index (RPI) for benefits in payment on pension schemes. There have been objections to this proposal on the basis that CPI tends to be lower than RPI.
In addition to these prospective discussions, the consultation period for changes to the PASNAS scheme has now ended, and the proposed changes to PASNAS will take effect from 1 August 2010, with scheme members seeing an increase in contribution rates from 1 August 2011.
These are all important issues, as the right to benefits from pension schemes is a major financial consideration for scheme members. We will be communicating regularly with staff in the autumn as all of these issues are clarified.