USS employers response to the USS briefing on funding position as of 31 March 2022

22 Jul 2022

Commenting on the publication by USS of its Accelerated Year-end Review briefing on the funding position as of 31 March 2022, a spokesperson for USS employers said:

“It’s good news that the funding position of the scheme has improved, and that the recent market conditions together with benefit changes – made as part of the 2020 valuation – and the substantial employer covenant support package have helped to put the pension scheme on a better financial footing. The briefing from USS shows the importance of the recent reforms to future benefits: without these reforms total contributions would be in excess of 36% for future benefits, with deficit recovery costs in addition.

“If this recent improved funding continues consistently up until the next valuation, scheduled for March 2023, it should allow stakeholders to consider more positive responses, such as changes to future benefits, lower contributions, or a combination of both.

Financial markets remain very volatile and the USS Trustee has said that it does not believe there are grounds to adjust benefits and/or contribution levels ahead of the next full valuation. 

“Nevertheless, we will continue to closely monitor this over the coming period hopefully to see more sustained improvements in the funding position. We are committed to finding ways of fast-tracking the next scheduled valuation so it can deliver positive changes for scheme members as quickly as possible, and to joint working with the University and College Union in the Joint Negotiating Committee to understand its priorities for the next valuation – such as lower member contributions or the continued deferral of the 2.5% inflation cap for new benefits – should the improved funding conditions continue. Over the coming months, we also hope to work with all stakeholders to bring about meaningful reform by developing lower-cost options for members, considering alternative scheme designs, and conducting a thorough USS governance review.”