The Universities Superannuation Scheme (USS) has formally agreed increases to pension contributions and will write to all members setting out the changes in early March.
The decision is a result of the 2017 valuation of the pension scheme and a subsequent cost sharing consultation with members.
What are the changes?
- On 1 April 2019, the first of three phased increases to contributions will be implemented.
- The rate members pay will increase to 8.8 per cent of salary (from 8 per cent) and the employer rate will increase to 19.5 per cent of salary (from 18 per cent).
- If you contribute an extra 1 per cent to the match, the employer match element is being withdrawn from 1 April.
- If you want to keep saving 1 per cent in the USS Investment Builder, you don’t need to take any action, but if you want to cancel the match visit My USS and follow the instructions on the ‘Manage my additional contributions’ page.
You can find more about these changes on the USS website here.
2017 and 2018 valuations
During the 2017 valuation of USS, alternative proposals were put forward by the Joint Expert Panel (JEP). USS will be carrying out a new 2018 valuation of the scheme’s funding position and this valuation could have an implication on further phases of contributions.
USS are consulting with employers on the 2018 valuation technical provisions, and on the level of risk that those provisions give rise to, in terms of the potential for the provisions to prove to be insufficient and the costs to be higher.
USS trustees have signalled that they can build this greater risk into the valuation assumptions, but would need agreement from employers and scheme members that if this additional risk becomes a reality, then additional contributions would be needed.
You can find more about the 2017 and 2018 valuation here.
