On 7 September 2020, the USS Trustee launched a consultation with its employer representative, Universities UK (UUK), on key aspects of the 2020 valuation.
The consultation is intended to determine the level of contributions required to fund member benefits and the Trustee’s consultation document covers a huge range of potential outcomes, with a number of factors yet to be determined.
The total contribution rate payable at the moment is 30.7% (21.1% from employers and 9.6% from members). From 1 October 2021 this is due to rise to 34.7% (23.7% from employers and 11% from members). USS is now predicting that the total cost of maintaining benefits at their current level and reducing the scheme’s deficit could run to somewhere between 40.8% to as high as 67.9%.
USS is keen to clarify that these are not its final numbers – these won’t be confirmed until December 2020, once the current consultation is complete and there’s been further work on assessing financial conditions and the strength of USS’s covenant.
This is unlike previous technical provisions consultations*, given the work still to be undertaken by USS, the continuing discussions regarding extra covenant measures, and the very wide range of potential outcomes.
Our University will require further information on a number of issues before we can fully respond to the consultation, including the results of the Trustee’s covenant assessment and discussions on an appropriate recovery plan. There is still much work to be done and our consultation response is likely to be focused on highlighting the areas for further work and clarity.
Employers have until 30 October 2020 to provide UUK with their feedback on the consultation. UUK will then have until 11 November to provide USS with a consolidated response.
* an estimate of a scheme’s liabilities
For further information
Previous SUSSED posts on pensions
