USS employers are calling for the 2023 valuation of the Universities Superannuation Scheme (USS) to be finalised quickly, so scheme members get the full benefit of lower pension costs in their take-home pay as soon as possible.
In a letter to USS, employers have signalled their support for the USS Trustee’s proposed outcome, and confirmed their support for the agreement reached earlier this year with the University and College Union, which represents scheme members, to lower contributions, improve pension benefits to the pre-April 2022 level, and explore a series of stability measures for the scheme.
Acknowledging the cost-of-living challenges faced by members, and the significant financial pressures faced by higher education institutions, employers responding to the recent Technical Provisions consultation stressed the importance of reducing contributions to the level required as soon as possible.
Employers have also reaffirmed their commitment to continuing to provide the significant covenant measures, introduced at the last valuation to lower the scheme costs. The strength of the employer support for USS (the employer covenant) has been assessed as strong.
Commenting Vivienne Stern MBE, Chief Executive of Universities UK, the formal representative for 340 scheme employers, said:
We continue to work closely with the union and USS to fast track lower contributions and improve benefits. We hope these changes can be implemented as quickly as possible to help both scheme members and employers facing serious financial pressures.
The significantly improved economic conditions for Defined Benefit pension schemes has led to this dramatic upturn in the scheme’s financial fortunes paving the way for these positive changes. We are also looking to the future by fully exploring, with USS and UCU, a range of options for creating greater scheme stability including alternative scheme structures and USS governance reform.”
Notes to editors
The USS Trustee has priced the return to April 2022 benefits at this valuation at a total contribution rate from employers and members of 20.6% of salary, which is significantly lower than the current contribution level of 31.4% and the circa 43% which was the cost of April 2022 benefits at the 2020 valuation.
If implemented, the lowering of contributions would mean that a scheme member earning £50,000 will be paying much less for their pension – £1,750 a year, or £145 a month, less as their pension contributions drop from 9.6% to 6.1% of salary until at least the next valuation in three years’ time.