Following consideration of Universities UK’s consultation response on the 2018 valuation technical provisions and proposed contingent contributions arrangement, the USS Trustee has set out three possible options for concluding the 2018 valuation:
- Contributions of 33.7% – also known as the ‘upper bookend’ – (23% for employers and 10.7% for employees) to apply from April 2020.
- Contributions of 29.7% – the ‘lower bookend’ – with a contingent contribution arrangement (20.4% for employers and 9.3% for employees). The Trustee has made clear that UUK's proposed contingent contribution arrangement is not acceptable, and they would require the strengthening of certain aspects of the proposal, which is detailed in their full response.
- Contributions of 30.7% (21.1% for employers and 9.6% for employees) to apply from October 2019, with a 2020 (rather than 2021) valuation. Should no agreement on the contribution rate from the 2020 valuation be implemented before October 2021, the contribution rate would rise to 34.7%.
All three options are predicated on the employers’ covenant remaining strong, while for the adoption of options 2 and 3, the USS Trustee would also require satisfactory implementation of debt monitoring and rule changes relating to exiting employers.
Employers are now being consulted over which of the three options is their preference. They have been asked to give an indication in advance of 16 May to inform discussions with both USS and the University and College Union (UCU) at the earliest possible opportunity, before submitting a fuller, formal response by 30 May.
Download the documentation received from USS below.