Universities UK (UUK) represents higher education employers in discussions over the future of the USS scheme, which is a valued part of the remuneration package in higher education.
The USS Trustee confirmed that the scheme had a deficit at the last valuation date (31 March 2017) which legally needed to be addressed.
On behalf of over 350 USS employers, UUK has been negotiating with the University and College Union (UCU – who represent the scheme members) over changing the scheme since January 2017 given the funding challenges it faces. UUK and UCU met more than 30 times during 2017 to discuss changes to the scheme.
In 2017, there was a strong appetite from a significant majority of employers to keep contributions to 18%. As such employers proposed a move to a defined contribution scheme, with the possibility of shifting back to an element of defined benefit if conditions were to improve.
In January 2018, UCU successfully balloted for strike action in opposition to these plans. Faced with significant industrial action, many employers asked UUK to go back to the negotiating table.
Through talks at the Advisory, Conciliation and Arbitration Service (Acas), a new reform proposal, jointly developed by UUK and UCU negotiators, would have secured defined benefits for scheme members, up to a salary threshold of £42,000, with an increase in employer contributions to 19.3% of salaries.
While the UCU negotiators agreed to take the proposal back to their members, UCU branches rejected it.
On 23 March 2018, Universities UK and UCU announced that they wanted to establish a Joint Expert Panel to review the USS valuation, processes and assumptions and to agree key principles to underpin the future joint approach to USS valuations. The establishment of the Joint Expert Panel received support from USS employers and UCU members.
On 25 July, USS announced plans to increase contributions from scheme members and employers, as part of the cost sharing process set out in the scheme rules. The proposed changes are subject to consultation.