The three options proposed by USS
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.
What was the College response to the three options?
UUK asked us for our preferred option of the three given by USS (see above). 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.