USS pension update: next steps to conclude the 2018 valuation
A recent JNC decision on how to conclude the 2018 valuation protects member benefits and caps contributions for two years. Alongside this, an enhanced offer is being discussed by UUK and UCU.
The Joint Negotiating Committee (JNC) met on 20 and 22 August to consider the 2018 USS valuation. The JNC is a national body made up of an equal number of Universities UK (UUK) and University and College Union (UCU) representatives, plus an independent chair. The committee decided, via the independent chairs casting vote, that:
- benefits should not be changed under this valuation;
- a revised approach to contribution rates should be introduced, resulting in lower increases to rates for both members and employers than those determined at the end of the 2017 valuation; and
- in line with the default cost-sharing arrangements set out in the scheme rules, the increased contributions from 1 October 2019 should be shared in a ratio of 65:35 as proposed by UUK: 21.1% for employers, and 9.6% for members, totalling 30.7%. These rates will be capped until October 2021.
The Pensions Regulator (tPR), which exists to protect members benefits, remains concerned about the level of risk in the USS. tPR regards the approach recommended by the JNC to be at the limit of compliance with the legislative requirements for prudence.
Further discussion planned between UUK and UCU about enhanced offer
In discussions with UCU, UUK made an offer - now confirmed in writing and subject to consultation with members and employers - to pay an additional 0.5% of the contributions, leading to a member contribution rate of 9.1% instead of 9.6%, providing UCU agrees not to proceed with the planned ballot for strike action on pensions.
The figure of 9.1% was the member contribution percentage recommended in the Joint Expert Panel (JEP)s first report, which both UCU and UUK supported. Even though benefit levels would remain protected for two years, UCU has reconfirmed its intention to ballot for industrial action from next week. That said, a further meeting between UUK and UCU representatives has now been scheduled for 4 September to further discuss the 9.1% offer. UUK, on behalf of the employers, has urged UCU to engage constructively with this recent enhanced offer and to consult its members on it.
Unless an alternative is agreed, it is likely that, at its planned meeting on 12 September, the USS Board will confirm the revised contribution rates decided upon at 22 August JNC (9.6% and 21.1%), for implementation from 1 October.
Your chance to discuss USS pension
At the University of Leeds, we remain committed to the provision of a pension scheme that is recognised by colleagues as a valuable benefit, and remains sustainable, stable, and fair regardless of age or career stage. A sub group of University Council (convened specifically to consider USS matters) has previously indicated its support for the proposal agreed at the JNC on 22 August, as the best of the options which were considered during the recent employer consultation.
We are planning some open face-to-face presentation and discussion sessions led by senior colleagues about USS pension developments.
Dates and further details will be announced shortly, and information will be available on the USS Pension In Depth section of For Staff website.