University Council’s response to UUK consultation on USS
The University has today published its response to a Universities UK (UUK) consultation with employers about possible solutions to challenges faced by the USS pension scheme.
As UUK publishes the collective employer position based on the consultation responses, the Council – the University’s governing body – has concluded that a long term solution might lie in an option called conditional indexation, an arrangement which pegs a part of annual pension provision to the performance of scheme funds.
And it notes that, in the meantime, it might be necessary to introduce an alternative model put forward by UUK, in order to avoid very high contribution rates in the near future.
The University has also today published the findings of a survey carried out on its behalf by actuarial advisor AON, to which more than 1,000 members of staff responded.
A sub-group of the Council considered this survey, alongside a separate one carried out by the University branch of the University and College Union (UCU), before putting forward its recommended consultation response to the full Council for approval.
The sub-group also benefitted from the insights of a working group, chaired by Deputy Vice-Chancellor, Professor Ha-Sui Yu, which includes early career researchers.
The main views expressed by the Council in its response to UUK are:
- That the conditional indexation model should be explored, given that it could put the USS on a secure and sustainable footing for the future.
- Noting that this might take a couple of years to introduce, if viable, an alternative proposal put forward by UUK, which would see contributions maintained at their current rate but some reduction in benefits, might need to be adopted on a time-limited basis.
- Support for retaining the hybrid Defined Benefit/Defined Contribution structure of the scheme, at least for the time being.
- The need to introduce flexibility into the USS, to give members options that suit their personal circumstances.
- A solution put forward by the USS Trustee, which would see a 42.1% aggregate contribution rate, would not be sustainable.
Further details of the options, including conditional indexation, presented by UUK for consideration, are available on the USS Employers website