Universities UK (UUK) has launched a consultation with employers in the Universities Superannuation Scheme (USS), seeking views on ways of creating a valuable, affordable, inclusive, and sustainable scheme for their staff for the long term.
In March 2021, the USS Trustee said that the cost to maintain current benefits would need to increase substantially; by at least 11% and possibly by up to 25% of salary.
Alongside the seven-week consultation, UUK will continue pressing the USS Trustee to reconsider its valuation assumptions, having recently expressed concerns to both the USS Trustee and The Pensions Regulator over the high level of prudence applied to the 2020 valuation.
The consultation outlines options for tackling the scheme’s increasing costs, sizeable deficit, and high member opt-out rate. An alternative approach to the 2020 valuation is proposed which, if adopted by the USS Trustee, should reduce headline costs and provide scheme members with valuable pension benefits at sustainable and affordable contribution rates.
Employers are being asked if they can offer additional financial backing – or covenant support – to lessen the rise in contributions. Considered alongside other reforms, this could enable a significant defined benefit element to be preserved at current contribution levels. Employers are also asked whether they would support the introduction of a new, short-term flexible option for the growing number of early career staff who are currently being priced out of the scheme.
Employers are being encouraged by UUK to engage with staff members eligible for USS to ensure their views are incorporated into discussions over the scheme’s future.
The consultation runs until 5pm on Monday 24 May 2021, and employer responses should be sent to firstname.lastname@example.org by that date.
The full consultation materials can be downloaded below. Supplementary USS Briefings are available on the USS 2020 valuation webpage.
We have provided a Q&A document which addresses queries relating to the consultation. Topics covered include the approach of the USS Trustee, scheme governance, and next steps with the valuation.
This page was updated on 9 April 2021 to include additional documentation.