Dear colleagues,

We are writing to you with an update on the USS pension scheme 2018 valuation. As you are aware, the USS Trustees have been consulting on three options. The College, after consultation with Heads of Department and staff, stated a preference for option 3 – if agreed, this would result in contributions of 21.1% for employers and 9.6% for employees applying from October 2019. There would also be a new valuation in 2020 under this option, rather than waiting until 2021. This would allow the Joint Expert Panel to complete the second phase of its work and for their recommendations to be considered at the earliest possible opportunity.

The majority of HEIs also opted for option 3 and we are waiting to hear from the USS Trustees whether this is an arrangement that can now be agreed. We understand that the Trustees are discussing the options with the Pensions Regulator who has expressed concern about whether the preferred option 3 goes far enough in protecting the interests of members in the scheme. We hope that the Trustee will be able to assure the Regulator of the need for this short-term variation to the 2017 valuation given the strength of the sector that stands behind the scheme.

If we are not collectively able to agree an option for the 2018 valuation, then the USS Trustees will revert to the 2017 valuation decisions that has already been approved by the Pensions Regulator. In October 2019 this default position will increase employer contributions to 22.5% and employee contributions to 10.4%. In April 2020 the employer contributions would increase again to 24.2% and employee contributions to 11.4%.  

Separately, we have received a letter from national UCU. The content is reproduced as appendix 1 attached. We have discussed this letter and the implications with Heads of Department and have a proposed response agreed with them in draft. We would like to give the wider College community the opportunity to comment on our proposed position before we submit this response, as part of our commitment to complete transparency on this important issue. We are therefore circulating the draft response to you today – attached as appendix 2.

UCU has set a deadline for responding by Wednesday 19 June 2019. Therefore we have very little time. Please do read the attachments and send any observations to us via your Head of Department or to the Provost’s email by 10 am Wednesday morning. We will consider these comments and circulate our final response once it has been sent to UCU.

If you would like to know more about the background to the valuation please visit our webpages where you will also find a modeller, developed by Imperial College, so you can see the financial impact on your net pay that result from the various options under consideration.

Thank you for your contribution as we collectively try to navigate this complex and important issue for staff.  

Best wishes,

Alice and Ian

Professor Alice P. Gast, President

Professor Ian Walmsley, Provost