April 21st, 2021
Universities UK (UUK) has launched a consultation with university employers on the Universities Superannuation Scheme (USS), seeking views on ways of ensuring a valuable, affordable, inclusive, and sustainable scheme for their staff for the long term.
As part of this exercise, the University of Nottingham is inviting USS scheme members, or those who are eligible to be members, to complete a short survey to gain your views on the future of the scheme.
In March 2021 the USS Trustee, the body which manages the pension scheme on behalf of university employers, announced that the cost to maintain current benefits would need to increase substantially to maintain its current benefits.
Currently, members contribute 9.6% of their salary into the scheme, and the university as employer contributes a further 21.1.%. It is likely that total contributions will need to rise by a combined minimum of 11% to retain current benefits for the future.
Alongside the employer consultation, UUK will continue pressing the USS Trustee to reconsider its valuation assumptions, having recently expressed concerns to both the USS Trustee and The Pensions Regulator over the high level of prudence applied to the 2020 valuation.
The consultation outlines options for tackling the scheme’s increasing costs, sizeable deficit, and high member opt-out rate. An alternative approach to the 2020 valuation is proposed which, if adopted by the USS Trustee, should reduce headline costs and provide scheme members with valuable pension benefits at sustainable and affordable contribution rates.
Employers are being asked if they can offer additional financial backing, known as ‘covenant support,’ to lessen the rise in contributions. Considered alongside other reforms, this could enable a significant defined benefit element to be preserved at current contribution levels. Employers are also asked whether they would support the introduction of a new, short-term flexible option for the growing number of early career staff who are currently being priced out of the scheme.
The deadline to complete the staff survey is Friday 7 May 2021 and all responses will remain fully anonymous.
Supplementary information is also available on the USS 2020 valuation webpages.
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