As part of our commitment to keep staff informed about developments related to their university pension schemes, we can provide you with the following reminder:
This coming Friday 1 April, changes to the future benefits which are earned by members of USS will come into effect. The USS website contains lots of information about these changes.
There will be no change to member contributions (which will remain at 9.8 % of salary). Employers’ contributions will increase from Friday by 0.2% to 21.6%.
Why is this happening?
The changes to future benefits, and the increase to employer contributions, follow a decision by the USS Joint Negotiation Committee (JNC) on a package of changes in response to the 2020 valuation which showed a substantial funding deficit and that the cost of future benefits had increased significantly. Implementing the changes has avoided very substantial increases in contributions.
Consultation
Following the proposal, affected staff and representative bodies were asked what they thought of the proposed changes in a consultation which ran from November 2021 to mid-January 2022.
One of the particular areas of concern was the reduction in the inflationary cap to 2.5%. Pensions are adjusted annually depending on the rate of inflation measured by the Consumer Prices Index (CPI), but in some cases subject to certain limits.
Reducing the cap to 2.5% would mean people would see the future benefits that they build up grow more slowly in periods when CPI exceeds that value. Note that this change does not affect the pension already built up. In the light of feedback during the consultation, the changes which will be implemented include a deferral of the introduction of the 2.5% cap until 2026.
Staff should refer to the USS website for definitive information about the changes and their impact. A further summary of the latest developments will be available in a video briefing by pensions expert Brendan Mulkern later in the spring,
For further information:
If you are a member of USS, you can access the USS modeller from here.
USS Benefit Illustrator (from April)
Previous SUSSED posts on pensions.
