Dear colleagues,

We mentioned in our message to you on Tuesday that we were expecting USS’s valuation report and yesterday USS shared a comprehensive update from the USS Trustee. USS emailed all members directly, and they are also inviting members to attend a webinar at 14.00 on Wednesday 10 March.

The valuation report sets out three scenarios showing the increase in contribution rates that would be needed to maintain the current pension benefits, depending on the covenant support measures employers feel able to support.

We will be reviewing the report carefully, but our initial reaction is that the position it sets out is extremely disappointing. Every scenario presents a significant increase in costs for employees as well as for employers – with total contribution rates of 42.1%, 49.6%, or 56.2% of salary – compared to the current contribution rate of 30.7% of salary. Even the most favourable option would be unaffordable and unsustainable for all of us.

The Pensions Regulator is clear that they find the methodology used by USS for the 2020 valuation is at the limits of acceptability with respect to risk.

We have worked hard to advocate for a fair and sustainable pension benefits package for our staff. We have pressed USS and the Pensions Regulator directly, and we have worked closely with the Russell Group and UUK who are representing all employers in the process, advocating for the JEP recommendations.

The Joint Negotiating Committee now has three months to decide how the increase in the overall contribution rate is to be met: by recommending changes to the structure of the Scheme’s contributions and/or benefits. As part of this process, later in March UUK will consult all USS employers. We will continue to advocate for you, and we will work closely with you to give our views to UUK, who represent employers on the Joint Negotiating Committee, to make sure that we continue to provide a fair and sustainable pension as part of our Total Remuneration Package.

The valuation process will take several months to complete, and so it is likely that the contribution increases scheduled for October 2021 (to 11% for employees and 23.7% for employers) will come into force.

We know that this is challenging news, and we are committed to working with you and supporting you as we consider the implications of the USS developments. We will be communicating with you and seeking your views as the consultation continues. You can find the latest information on our USS webpages, and we invite you to register to attend the Staff Forum on 17 March, where we will be sharing the current status.

Best wishes,

Alice and Ian

Professor Alice P. Gast, President

Professor Ian Walmsley, Provost