The USS Trustee board, has agreed to progress the Joint Negotiating Committee (JNC) recommendations to change the USS pension scheme, saving university employers and hundreds of thousands of scheme members from steep contribution increases from 1 October 2021.
It follows a recommendation by the JNC on 31 August to accept the alternative approach to the 2020 valuation developed by Universities UK (UUK), the formal representative of over 340 employers in the scheme, after a consultation with all scheme employers.
Scheme members and employers were facing escalating contributions from October – for employers, from 21.1% of salary to 23.7%, while members would have seen their payments rise from 9.6% of salary, to 11%. But with the USS Trustee board’s approval of the JNC’s decision to modify benefits, new rates of 9.8% for members and 21.4% for employers will apply instead.
A spokesperson for UUK, on behalf of USS employers said:
“The USS Trustee board’s decision means decent pension benefits can continue being provided for contributions of 31.2% of salaries, which is close to the current contribution rate of 30.7%, and substantially lower than the 34.7% rate the USS Trustee previously said would apply in October. This decision, in combination with the other reforms, also prevents a further escalation of contributions next year.
“Avoiding higher contributions is essential for both employers and scheme members. For employers, higher rates would have consequences for jobs, teaching and the student experience, while unaffordable contributions for members would undoubtedly force many to drop out of the scheme in greater numbers, and miss out on money from their employer towards their future.
“Employers are committed to working in partnership with UCU to progress a major governance review of USS, jointly exploring future options for scheme design, including shaping a lower-cost option so staff on lower salaries are no longer priced out of retirement saving by high contribution rates.”
Read the full announcement in this USSEmployers press release.
Join a USS pensions update with Pensions Expert, Brendan Mulkern this September.
USSEmployers website (owned and managed by UUK)
