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USS Pension Reform following 2017 Valuation

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Latest news (24 January 2018)

USS Joint Negotiating Committee reaches decision on pension reform

USS pension reform discussions have progressed, with the Joint Negotiating Committee coming to a decision based on latest proposals for change.

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).

Two proposals were considered at the meeting:

  • UCU’s proposal, as tabled in December 2017, which offered some changes to benefits and raised employer and USS member contributions, and
  • UUK’s proposal, a revised version of its proposal from November 2017, which had been modified during subsequent negotiations (see summary features below). JNC voted in favour of this proposal, via exercise of the independent chair’s casting vote.

The USS trustee must now consider the JNC’s recommendation and, if accepted, a consultation period will begin. Associated resulting changes to the scheme are subject to member consultation and will 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.

Details of the proposed reformed scheme

Elements of the proposed reformed scheme, subject to USS trustee acceptance and member consultation, include:

  • Future benefits will 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 will continue on a defined basis as they are now (i.e. scheme members will be assured a specific level of benefit) so that employers continue to provide protection in the most difficult of circumstances.
  • A range of funds in which members can choose to invest their savings, with employers paying the costs of investment charges, unlike with many other schemes.
  • A lower-cost saving option, where members can pay contributions of 4% rather than 8% of salary, while still benefitting from an 18% employer contribution.

Employers will now hold a consultation with all members on the possible impact of these changes on individuals. This is expected to run for 60 days from the second half of March 2018. Any resulting changes would not come into force until 1 April 2019.

At Leeds

While the negotiations have taken place at a national level, at Leeds we have been clear that reform is necessary in order to provide a scheme for members that is sustainable and stable, as well as being valued, portable and fair.

Earlier this week, UCU announced that 55.3% of Leeds UCU members voted in its related ballot on industrial action, with a majority voting for both strike action and action short of a strike (ASOS). The national average of UCU member participation in associated local ballots was 58%. At Leeds, approximately one third of academic and academic related (professional and managerial) staff are members of UCU and were therefore entitled to vote in the ballot.

UCU has published an intention to announce 14 days of strikes and other action to start in February, although the University is yet to receive formal notification.

We continue to commit to sharing information with colleagues and will support a full USS member consultation in the spring.

Further information

UUK statement and updated Q&A (both 23 January 2018) 

  • USS pension scheme is undergoing its 2017 valuation: there is a significant funding deficit.
  • 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.
  • While we recognise that the prospect of pension reform will naturally concern colleagues, we do believe that reform is necessary. 
  • Further information is available below in Find out more 

What has happened so far?

  • 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 will 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.
  • 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 is consistent with that of the majority that contributed.
  • 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 has opened a ballot for industrial action. 
  • UCU has tabled its own proposal and UUK has commented.
  • UCU has announced industrial action

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.

We recently asked Mercer, independent pension experts, to host a series of member information and Q&A sessions for staff. You can view Mercer’s presentation here and in the related links section below (you'll need to log in with your University account details). Questions and answers from these sessions are being collated and will be made available in this section soon.

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:

USS Pension Updates

USS pension: information sessions February 2018

We have arranged another series of information sessions aimed at USS scheme members. You can sign up now. Sessions will be hosted by independent experts, Mercer, on 12 and 19 February 2018.

USS Joint Negotiating Committee reaches decision on pension reform

USS pension reform discussions have progressed, with the Joint Negotiating Committee coming to a decision based on latest proposals for change.

UUK comments on UCU proposal for USS pension reform

Universities UK (UUK) has commented on the University and College Union (UCU) proposal to reform the USS pension scheme.

USS valuation: further extended deadline for JNC decision

The USS Joint Negotiating Committee (JNC) agreed on 19 December to defer until 23 January 2018 a decision on the proposed reform of USS benefits.

USS pension: UUK updated Q&A and benefits modelling

UUK has published further information relating to the current proposals for changes to the USS pension scheme as a result of the 2017 valuation.

Browse USS Pension Reform following 2017 Valuation by date