As part of the package of reforms coming out of the 2020 USS valuation, employers collectively supported exploring whether conditional benefit designs could make the scheme more sustainable in the longer-term and provide better value for the contributions being paid.
Universities UK (UUK), its advisers Aon, and the USS Trustee have worked collaboratively on exploring possible approaches to greater sustainability in the pension scheme – with Conditional Indexation being one of the leading considerations.
Conditional Indexation is a defined benefit (DB) pension scheme design where some or all of the future increases (also known as indexation) applied to benefits are conditional on the scheme’s funding position. (It is important to note that past benefits cannot reduce, and benefits in payment must increase by at least the lesser of CPI and 2.5%.)
Alongside this update on Conditional Indexation, Universities UK is asking for employer views on progressing a more detailed exploration of a possible implementation of Conditional Indexation within USS at the appropriate time (beyond the 2023 valuation).
USS employers are invited to respond to Universities UK by Friday 16 June 2023.
This page was updated on 4 July 2023 to include a joint UUK and USS response to a DWP consultation on automatic enrolment requirements