Responding to a new proposal from the University and College Union (UCU) for concluding the 2020 valuation of the Universities Superannuation Scheme (USS), a spokesperson for Universities UK (UUK), on behalf of USS employers said:
“We will share UCU’s proposal to complete the 2020 valuation with employers.
“UCU’s suggestion that employers pay 23.7% of salary from April – an increase of 2.3% and over £200 million more a year – rising to 25.2% next year, is far beyond the mandate employers have given Universities UK. No employer has agreed to pay such high costs because of the damaging impact on teaching, research, the student experience, and jobs. The increase in member contributions, from 9.8% to 11% of salary, and then 11.8% of salary next year, will make the scheme unaffordable for many staff, and undoubtedly increase the already high drop-out rate among the lower-paid.
“The union’s proposal does not appear to be a serious attempt to reach agreement as it doesn’t reflect the views employers have expressed in consultations. Employers will also question why the proposal has arrived so late in the valuation cycle – especially since industrial action has already been taken – and will be keen to understand why it differs significantly from that previously briefed to the media by UCU, which proposed benefit reforms to tackle the scheme’s increased costs.
“We look forward to a formal discussion through the Joint Negotiating Committee about both the UCU and UUK proposals with the hope that an affordable solution can be found.”
Notes to editors
- Employer contributions of 25.2% of salary would cost employers around £350 million more a year
- The proposal put forward by UCU represents a departure from the default cost-sharing arrangements in the scheme – the 65/35 split in costs between employers and members – which we understand employers are keen to retain when stakeholders cannot agree a way forward.
- Under UCU’s proposal, the member contribution will rise from 9.8% to 11% of salary in April 2022, and again to 11.8% of salary in October 2022.
- The latest information published by the USS Trustee indicates that carrying out a new valuation of the scheme will not result in an improved financial position, as while the deficit has reduced, the cost of future pension payments has in fact risen.