What is USS?
The Universities Superannuation Scheme (USS) is a pension scheme. It provides benefits in predominantly defined benefit form.
USS is one of the biggest private pension schemes in the UK and is used by over 340 employers from across the wider higher education sector.
Which employers are in USS?
The employers in the scheme range from large universities and research institutes with many hundreds of members to much smaller not-for-profit organisations which carry out related education and research activities. Some employers are funded predominantly from tuition fees, research grants, public funds and/or their endowments, whilst others rely on to a much greater extent on external and charitable fundraising.
Universities UK (UUK) is the formal representative of all the employers in USS – whether they are a university or not – and leads and negotiates on scheme issues on behalf of all 340 employers. UUK also owns and manages this website.
Who manages the scheme and the investments?
USS Limited is the corporate trustee responsible for the management and administration of the scheme. The scheme is supervised in terms of its conduct of operations and financial reporting (and in particular in the funding of the scheme’s defined benefit promises) by The Pensions Regulator.
The trustee, supported by its advisory committees, directs and controls the scheme to ensure that it continues to provide a valuable way for members to save for retirement, and is efficient and cost-effective for employers.
Who represents member and employer interests?
Because USS is such a big scheme, it is important that all interests are well represented.
This includes not only the Trustee who manages the investment fund; but the employers who contribute to the scheme on behalf of their employees, and the scheme members themselves who also pay in a proportion of their salary for specific benefits when they retire.
The employers are represented by Universities UK, and the members by the University and College Union.
Universities UK (UUK)
UUK is the nominated formal representative for 340 USS employers participating in USS since the scheme was formed in 1975.
UUK is the collective voice of 136 universities in England, Scotland, Wales and Northern Ireland. Its mission is to create the conditions for UK universities to be the best in the world; maximising their positive impact locally, nationally and globally. Universities UK acts on behalf of universities, represented by their heads of institution.
University and College Union (UCU)
UCU is the nominated formal representative for USS scheme members.
UCU is a trade union that represents staff at UK universities, colleges, prisons and other training organisations. The union represents academics and researchers as well as managers, administrators and other staff such as librarians.
How is the scheme governed?
There are two key governance groups which together are involved in the management and governance of USS.
The USS trustee board
The USS trustee board is the board of directors who run the trustee company. It is comprised of four individuals nominated by Universities UK, three nominated by the University and College Union, and five who are independent who are appointed by the trustee board itself. The members of the USS trustee board are effectively the scheme’s trustees; they have a fiduciary duty to act in the best interests of the scheme’s beneficiaries, and they have defined duties under the USS scheme rules, for example to decide on contribution rates, to manage the scheme’s investments, and to deliver scheme administration and communication.
The Joint Negotiating Committee (JNC)
The JNC is a separate body, made up of five representatives from UCU five representatives from UUK, and an independent chair.
This JNC’s responsibilities include feeding in views to the USS trustee on behalf of both the scheme members and employers, and crucially deciding on any changes to scheme.
The USS trustee is responsible for setting the contribution rate required in order to deliver the scheme benefits, and the JNC has the responsibility to decide how increases (or indeed decreases) in costs to the scheme should be met.
The JNC’s options are to increase (or decrease) contributions or change future benefits or a combination of both. If the JNC does not reach a decision, a default cost-share formula applies under which increases (or decreases) in contributions are shared in a ratio of 65:35 for employers and members respectively. The JNC also provides its inputs on several other areas in the scheme, for example on the detail of rule changes, on matters relating to scheme funding, and on USS-led surveys and communications.
The USS website has more information on the USS trustee board and the JNC, as well as other committees involved in the scheme:
What is the Joint Expert Panel (JEP)
The JEP is a panel of independent experts.
It is comprised of six actuarial and academic experts, nominated equally (three each) by UUK and UCU. The panel is led by a jointly agreed chair, Joanne Segars OBE.
Under the chair’s guidance, the panel examined the assumptions and methodology used for the 2017 valuation, and submitted a report of its findings in September 2018.
Since February 2019, the JEP has been working on a second report, looking at the valuation process and governance, and considering the long-term sustainability of the scheme. It is expected to report by the end of 2019.
What is the Pensions regulator?
The Pensions Regulator (TPR) is the UK regulator of workplace pension schemes. It is the public body that makes sure that employers put their staff into a pension scheme and pay money into it. It also ensures workplace pension schemes are run properly so that people can save safely for their retirement.