Changes to the USS pension scheme
Response to 2018 valuation consultation
Following the conclusion of the 2017 valuation, USS are consulting with UUK and employers on the 2018 valuation. This valuation includes USS’s consideration of the report of the first The Joint Expert Panel (JEP).
UUK asked us for our preferred option of the three given by USS (see below). Following input from staff, on 30 May 2019 we sent the following response:
We note the three options set out by the USS Trustees for concluding the 2018 actuarial valuation and wish to confirm our preferred method for completion would be Option 3.
We recognise the short timescales involved to enable USS to complete the 2018, submit by the statutory deadline of 30 June 2019, and feel that in the short-term this is the most acceptable method to complete the valuation.
We welcome the Trustees decision to carry out the next valuation in 2020 rather than 2021, which will allow the JEP to complete its second phase of which we fully support.
USS proposed three options that they could accept to finish the 2018 valuation.
If you are a member, the current benefits would remain the same for each option. Each option avoid any significant increases to employer and employee contributions currently scheduled for October 2019 and April 2020, as a result of the 2017 valuation.
- Option 1: Contributions of 33.7% (23% employers; 10.7% employees) to apply from April 2020.
- Option 2: Contributions of 29.7% with contingent contributions (20.4% employers; 9.3% employees). USS said UUK's proposed contingent contributions would need to be strengthened for this option to be acceptable (greater likelihood of triggering, bigger step-ups once triggered). Given the consultation that would be required around contingent contributions it is inevitable the currently scheduled increases for October 2019 and April 2020 would apply.
- Option 3: Contributions of 30.7% (21.1% employers; 9.6% employees) to apply from October 2019 and a new valuation would be undertaken in 2020. The contribution rate would rise to 34.7% in October 2021, unless an alternative was agreed under the new valuation.
We submitted our final response to UUK after meetings with Heads of Department, UCU representatives and feedback at a staff meeting. For those of you who were unable to attend this meeting in person, you can access the slides and a video recording here [login required].
The USS Trustee responded to UUK’s submission on the 2018 valuation consultation in May. Read the Trustee's reply
How does the 2017 valuation affect my contributions?
USS have confirmed that the 2017 valuation, which was finalised before consideration of the recommendations of phase 1 of the Joint Expert Panel, is now closed and has been submitted to the Pensions Regulator. All members will receive a letter from USS confirming this and sharing a link to the Summary Funding Statement during March. Access the letter now [pdf]
Under the 2017 valuation the employer and employee contributions will increase as follows:
|Current contributions||From 1 April 2019||From 1 October 2019||From 1 April 2020|
We hope a solution will be found through the 2018 valuation consultation to avoid the significant increase in employer and employee contributions in October 2019.
We have created a modeller so you can see the effect that the planned and proposed contribution changes would have on your own contributions and take-home pay. Download the modeller [Excel]