Universities UK (UUK) represents 340 higher education employers, including universities, research institutions and charities, in discussions regarding Universities Superannuation Scheme (USS), the pension arrangement which forms a valued part of the remuneration package of many staff in higher education.
USS, along with many other schemes in the UK that provide defined benefits, has in recent years seen the costs of those benefits increase. In short, changes in the UK and global economy mean that expected returns in the future from the scheme’s investments are lower, meaning that more money is needed to fund USS’s pensions promises.
These challenges are discussed in detail when a formal ‘valuation’ of USS takes place; these have taken place as at March 2017 and March 2018, and another is planned for March 2020. In these discussions, UUK is committed to securing the best possible outcome for scheme members, scheme employers, the USS Trustee and The Pensions Regulator so that the scheme can continue to offer excellent, sustainable benefits while making sure benefits are safe and secure for the long-term.
For more information about the role of the trustee and the regulator, see who’s involved.
- March 2017: The USS Trustee – which is responsible for deciding how much money needs to be paid into the pension scheme – announces the scheme has a large (£7.5bn) deficit that needs to be addressed, alongside an increase in the costs of providing future (new) defined benefits.
- November 2017: UUK, representing the 340 employers in the scheme – proposes that the ‘defined benefit’ (DB) section of the scheme be converted into a wholly ‘defined contribution’ arrangement, as a more sustainable pension arrangement and to avoid damaging increases to contributions for employers and members.
- February 2018: In response to the employer proposal, the University and College Union (UCU), which represents the scheme’s members, launches strike action across 61 universities.
- April 2018: The strike action is suspended when UUK and UCU – through talks supported by Acas – agree to set up a Joint Expert Panel (JEP), to independently review the 2017 valuation, and suggest possible areas of adjustment. The proposal to temporarily close the DB section of the scheme is withdrawn, and status quo benefits are maintained (except for the removal of the 1% employer matching contribution).
- September 2018: The Joint Expert Panel (JEP – see who’s involved), comprised of independent experts nominated by UUK and UCU, publishes a set of recommendations on how the 2017 valuation could be adjusted. UUK, following consultation with employers, offers its conditional support for the panel’s findings.
- January 2019: The USS Trustee concludes the 2017 valuation under the scheme’s ‘cost sharing’ arrangements, with phased contributions increases for members and employers, and announces a 2018 valuation, to allow full consideration of the JEP’s recommendations and the latest data to be incorporated.
- August 2019: After the publication by the USS trustee of the new valuation report (after appropriate consultation), the scheme’s Joint Negotiating Committee (JNC) decides to conclude the 2018 valuation with a total contribution rate of 30.7% of salary, with employers paying 21.1% and employees 9.6% of salary.
- September 2019: UCU ballots its members for further industrial action in opposition to the outcome of the 2018 valuation, stating that employers should pay all contributions increases above 8% (alongside a dispute on pay and related issues). UUK negotiators offered to consult with employers regarding a reduction in the member contribution to 9.1% and make up the 0.5% to avoid strike action, however this was rejected by UCU.
- October 2019 The ballot results in 46 branches meeting the turnout threshold, although fewer members voted in favour of strike action than in the 2018 ballot. UUK reaffirms commitment to further talks, to prevent strike action that would be damaging to both staff and students.
- November 2019 Strike action takes place in support of UCU’s two separate disputes – on USS, and on pay and related issues – for an initial period of 8 working days (25 November 2019 to 4 December inclusive). UUK makes clear the position of employers that there is no support for an improved national offer on USS and writes to UCU to set out areas of joint working around the 2020 valuation.
- December 2019 The JEP published their second report focusing on the long-term future and purpose of USS, beginning with the 2020 valuation. UCU, UUK and USS agree to meet to discuss the approach for progressing the recommendations. Pensions strike ballots open in a further 13 institutions.