What the College is doing
The College understands the strength of feeling amongst our members about the recently adopted changes to USS and shares frustrations on the outcome of the valuation.
In particular, it is disappointing that the recommendations of the Joint Expert Panel were not fully implemented, and that – in the view of the College – USS continues to exercise an overly-prudent assessment of the health of the scheme. In our position in respect to USS, the College has taken into account two important considerations:
- In the short-term, it was legally required that a path forward be found prior to early 2022 to avoid the ‘backstop’ of the original proposals put forward by USS. This included contribution rate increases of up to 25%. Given this unacceptable alternative, the College accepted the recently adopted proposal as a pragmatic yet imperfect short-term route.
- In the long-term, it clear USS needs a more sustainable footing. Therefore we will continue to urge all parties to explore the feasibility of alternative approaches that will give the necessary long-term stability and viability to the USS scheme. Although the current valuation has concluded, we will continue to strongly advocate for an exploration of conditional indexation, or alternative scheme designs, to make it possible for USS to continue as a collective, mutual, multi-employer scheme with an ability to invest for the long term in growth-seeking assets.
Our position is informed by the feedback provided by the USS Staff Working Group, as well as through surveys and discussions with members. USS must also be considered within the context of our broader Total Remuneration Package.
The USS pension scheme needs a more sustainable footing
We also agree that there is an urgent need for long-term scheme reform. We call for the creation of a well-resourced working party to explore the feasibility and promise of alternative approaches that will give long-term stability and viability to the USS pension scheme.
Maintaining a hybrid scheme is key
We will continue to strongly argue for both a Defined Benefit and Defined Contribution component. We also believe this should include a lower cost, more flexible alternative as part of USS to give members a more attractive, affordable, and sustainable option.
You can learn more about the ways we engage with our staff and feed into the valuation on the pages below: