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USS Pension Reform following 2017 Valuation

Latest news

6 November 2018: USS cost sharing consultation now closed. Read the update...

USS pension consultation: Watch the information session and have your say

Watch a recent information session from 20 September 2018, given by independent pension experts Mercer to university colleagues on the USS pension scheme. The session covers how the USS pension currently works, the proposals for change that are being consulted on and an understanding of the views held by different groups.

The 40 minute video is split into sections so you can select the part of the presentation that is most relevant to you. After pressing play, click on the ‘i’ button on the bottom right to select your section.

Don’t forget to have your say before 2 November 2018

If you’re a USS pension member, a member representative or a prospective member, the consultation is your chance to have a say on proposals, including:

  • the removal of the employer match
  • the change to contributions as a result of the cost sharing proposals
  • how the increase in contributions is phased up to April 2020
  • alternative or additional proposals that you think could also address the challenges identified in the 2017 valuation.

To find out more and submit your response to the consultation, visit the consultation website

Resources

Joint Expert Panel 

The Joint Expert Panel (JEP) has published its report about the 2017 USS pension valuation. An executive summary and the full report are published on the JEP website.

The JEP was set up to examine the valuation of USS and was tasked with agreeing key principles to underpin the future approach of the University and College Union (UCU) and Universities UK (UUK) to the USS valuation. 

Alongside but separate to this JEP process, the USS trustee consultation with members and eligible employees about the proposals for implementing the cost sharing rule continues until 2 November. Visit the USS employers website to find out more about why these two processes have to run at the same time. 

Find other related news on the USS Pension Updates panel on this page. 

Questions

Visit USS website to find the answers to key questions, such as: 

  • Why cost sharing? The law, the scheme rules, the timescales, the cost
  • What happens next? 

The cost of USS pension 

  • HE employer pensions contributions are high, with USS scheme among the highest, even before the costs sharing rule increases costs further.
  • At Leeds, this currently amounts to £49.9m p.a. total employer pensions costs: £34.2m on USS and £15.7m on other schemes. After the cost sharing rule is fully implemented (according to USS proposals which are subject to consultation), the employer costs of USS at Leeds are expected to increase by £13.1m to £47.3m p.a. 


University of Leeds position on USS pension reform

  • While we recognise that the prospect of pension reform will naturally concern colleagues, we do believe that reform is necessary. 
  • It’s important for us to have a pension scheme which is valued, sustainable, stable, portable and fair:
    • Valued: so we can recruit, reward and retain very good people.  
    • Sustainable: so the scheme continues to be affordable and secure for individuals and employers.
    • Stable: so there’s confidence in the scheme.
    • Portable: so it helps colleagues move freely around the sector to develop their careers.
    • Fair: so the scheme considers and acts on behalf of all members, regardless of age or career stage. 


What has happened so far

Below is a chronological history of the 2017 valuation process. You can also view USS's visual overview of 'The 2017 valuation story so far' (published 25 July 2018) 

  • Universities UK (UUK, on behalf of employers) and the University and College Union (UCU, on behalf of employees) are equally represented on the USS Joint Negotiating Committee (JNC). The JNC is responsible for making a decision about how the scheme should be structured in future, often referred to as ‘pension reform’. This decision was due by 18 December 2017 in order to meet statutory requirements, but on 19 December, the decision was deferred until 23 January 2018.
  • Any JNC-agreed changes to member benefits or contributions necessitate a full consultation with scheme members and other affected employees in spring 2018.
  • Changes would apply only to ‘future benefits’ i.e. benefits which are yet to be accrued. Members’ benefits which have been built-up to date and before any contribution/benefit changes are implemented are protected by law.
  • 2016: UUK developed a survey to inform the Employers Pensions Forum’s long-term pensions strategy and the development of an employer position on USS. You can access the University’s submission here
  • March 2017: UUK consulted with USS employers concerning the USS valuation methodology and inputs and you can access the University’s submission here
  • In autumn 2017, UUK consulted with university employers about the valuation. The University of Leeds’ governing body (the Council) reluctantly concluded that significant change was needed to the existing scheme. That view was consistent with that of the majority that contributed. While the situation has developed significantly since that date, the University's response, consisting of a questionnaire and covering letter, can be read here
  • UUK subsequently made a proposal to JNC, based on the consultation and on behalf of employers nationally, that:
    • future benefits would be delivered by USS Investment Builder, i.e. a defined contribution (DC) scheme, while keeping open the option of returning to defined benefits (DB) or a hybrid model should the financial outlook improve;
    • death and incapacity benefits would continue on a defined basis as they are now (i.e. scheme members would be assured a specific level of benefit) so that employers would continue to provide protection in the most difficult of circumstances.
  • UCU opened a ballot for industrial action. 
  • UCU tabled its own proposal and UUK has commented.
  • UCU announced industrial action
  • At its meeting on 23 January 2018, the USS Joint Negotiating Committee (JNC) reached a decision about scheme reform, by the casting vote of its independent chair, in support of a revised proposal from Universities UK (UUK).
  • According to USS, the JNC’s decision results in an estimated funding deficit of £6.1 billion, which means the scheme is 91% funded.
  • UUK wrote an open letter to USS pension scheme members.
  • USS members due to receive individual consultation packs by 16 March, ahead of consultation opening from 19 March 2018.
  • 13 March 2018: Via Acas talks, UUK and UCU agreed a revised proposal, to be considered by their members and the JNC. Member consultation on the existing proposal temporarily suspended by the USS Trustee. UCU branches rejected revised proposal.
  • 23 March 2018: UUK and UCU announce a proposal to establish a joint expert panel to consider the valuation of the USS. This proposal was put to UCU members in a consultative ballot.
  • 13 April 2018: UCU members voted to accept the proposal and suspend industrial action.
  • 27 April 2018: The JNC revoked the 23 January proposal.
  • 3 May 2018: USS Trustee issued update confirming that the consultative member ballot about the 23 January proposal is no longer needed (since the proposal has been revoked) and that plans must progress to invoke 'cost-sharing' rules 76.4-8.
  • 18 May 2018: UCU and UUK announced Joanne Segars OBE as Chair of the USS Joint Expert Panel (JEP).
  • 22 May 2018: UCU announced its JEP members.
  • 25 May 2018: UUK announced its JEP members.
  • June - July 2018: The JEP held its first seven meetings. Published updates from those meetings are accessible via the 'USS Pension Updates' panel on this page and on the UUK website.  
  • July 2018: UUK consulted with USS employers on a range of matters arising from a USS Trustee update, including, among other topics: the ability of employers to make higher contributions in future, the approach to increasing contributions and the possible impact of higher contributions on members. You can access the University’s submission here
  • 25 July 2018: USS shared detail about how the 'cost sharing' rule will affect members.
  • August - September 2018: The JEP held further meetings. Published updates from those meetings are accessible via the 'USS Pension Updates' panel on this page and on the UUK website.  
  • 3 September 2018: USS opens member consultation about implementation of the cost sharing rule 76.4-8
  • UUK launched a new website dedicated to information about the USS 2017 valuation process, ussemployers.org.uk
  • September 2018: UUK launched a consultation with employers about the JEP Report recommendations. You can access the University's submitted response here.
  • 8 November 2018: UUK published a statement about the employers' views on JEP recommendations.

USS Pension Updates

USS pension: cost sharing consultation now closed

All the consultation responses received from Leeds colleagues will join those from other USS member institutions and be submitted to the USS trustee board later in November for consideration.

USS valuation: USS rejects claim of an error in ‘valuation test 1’

You may have seen information which suggests there was an error in the way USS applied its ‘valuation test 1’.

USS valuation: Joint Expert Panel publishes its report

The Joint Expert Panel (JEP) has published its report about the 2017 USS pension valuation.

USS Pension: Joint Expert Panel meeting (9 and 10)

The ninth and tenth meetings of the Panel took place on 29 August and 3 September and an update from those meetings is now available.

USS pension: cost sharing consultation open

USS consultation open until 2 November; book your place on an information session.

Browse USS Pension Reform following 2017 Valuation by date

Find out more

The University is committed to making information available to staff members when it can, including member updates and publications, and we will update this page as matters develop.

In the meantime, further information can be found online via the following links to the USS and UUK websites and through the monthly USS member eNewsletter, which is circulated to relevant staff at the University. 

Related links:

University of Leeds:

USS (runs the pension scheme):

UUK (represents employers):