The valuation has aimed to assess what level of contributions from employers and employees are required to cover the liabilities the scheme currently has and may have in the future. Additional factors - such as covenant strength and deficit repair contributions - can decrease the risk assessment and, in turn, the contributions required from employers and employees. 

Where we currently are

After providing an initial proposal that - amongst other impacts - would result in considerable contribution rate increases, the USS Trustee considered an alternative proposal submitted by UUK. In September, this alternative proposal was endorsed by the Joint Negotiating Committee. In summary, this alternative proposal commits USS to:

  • Minimising the increase in contribution rates to no more than a 0.2% increase for employees and a 0.3% increase for employers.  
  • Exploring introducing a new, lower-cost contribution option for newer members. 
  • Launching a major review of the scheme’s governance and structure, which will include investigating the implementation of a conditional indexation model. This review would be undertaken by representatives of employees, employers and USS. 
  • Maintaining the valued Defined Benefit/Defined Contribution hybrid model (with Defined Benefit applying up to a salary threshold of £40,000 with 1/85 accumulation rate and retaining Defined Contributions at an overall 20% of salary above that threshold). 
  • Should the scheme’s financial outlook improve, benefit improvements will be considered in turn.

In order to implement this USS is undertaking a short consultation with UUK 

The consultation is on the proposed recovery plan for responding to the deficit assessed by the USS Trustee as at 31 March 2020, and on a revised Schedule of Contributions effective from 1 October 2021. The USS Trustee is also consulting on the Statement of Funding Principles at the same time. We are committed to the strengthened covenant that is requested as part of the consultation.

 

Current USS proposals

Scenario 1

Total contributions required:
56.2% of salary (37.4% from the College, 18.7% from staff)

Scenario 2

Total contributions required:
49.6% of salary (33.1% from the College, 16.5% from staff)

Scenario 3

Total contributions required:
42.1% of salary (28.1% from the College, 14% from staff)