The current valuation (2018) of the USS pension scheme is ongoing.
The USS Trustee, which is responsible for the scheme, is deciding how much money needs to be paid into it to maintain the current level of defined benefit pensions. The scheme is funded by contributions from employers and scheme members, and returns on investments made by the Trustee.
The Trustee has legal responsibility for the way the scheme is run. It established contribution increases as part of the last valuation (2017) which have seen the employer contribution rate rising from 18% to 19.5% of salary, and member contribution levels going up from 8% of salary to 8.8%.
Unless new funding arrangements are agreed in the current valuation, contribution levels will increase further to 10.4% for members in October this year, and 11.4% in April 2020. Employer contributions would be 22.5% in October 2019 and 24.2% of salary from April 2020.
Employers have given their support for 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 be implemented before October 2021, however, the contribution rate would rise to 34.7%.
Universities UK, which represents 341 scheme employers, is committed to seeking a balanced solution as soon as possible that is acceptable to the USS Trustee, The Pensions Regulator, the University and College Union, as well as employers. Discussions continue between these organisations.
The Joint Expert Panel, which was established by UUK and UCU, is considering how the long-term sustainability of the scheme can be secured, and will publish a new set of recommendations in the autumn.