USS – 2020 valuation
Find out about the impact of the 2020 valuation and next steps.
Pension schemes at ßÏßÏÊÓƵ
There are three different pension schemes at ßÏßÏÊÓƵ, depending on your role:
- University Superannuation Scheme (USS), for academic staff and professional services staff on grades 7-10
- ßÏßÏÊÓƵ Pension Savings Scheme, for professional services staff on grades 1-6
- ßÏßÏÊÓƵ Pension and Assurance Scheme – for long-serving members of professional services staff, closed to new members.
This page relates only to the USS scheme.
Last updated: January 2023
Background of the USS pension scheme
The USS scheme has been in place since the 1970s. It is one of the largest private pension schemes in the country and provides retirement income, ill health benefits and life cover to hundreds of thousands of university staff in the UK.
Every few years, the financial health of the scheme is assessed to make sure there is enough money in it to cover all the benefits that members (you) are accruing. This is called a "valuation".
Because of a number of factors, the scheme is becoming more expensive to run and less affordable for both employers (340 organisations, including ßÏßÏÊÓƵ) and members. This has become more pressing since the Covid-19 pandemic and other financial pressures came into play.
Over the past decade, contributions from employers have risen by 50%. Member contributions have increased, too.
This is leading to more staff opting out of the scheme, leaving them without adequate – or even any – retirement benefits or life cover.
This is a national issue, which requires a national solution. ßÏßÏÊÓƵ represents about 0.7% of all USS scheme members. While we can only play a limited role in the discussions, we want you to have the full picture.
What’s happening now?
The last valuation of the USS scheme concluded in 2021 and those changes came into effect on 1 April 2022.
The University’s focus is now on the agenda for the next valuation to be held in March 2023. The Vice-Chancellor will work with staff, UCU representatives and UUK to secure reform, including notably: low-cost contribution options, governance improvements and benefit conditional indexing. It will be important to ensure the next valuation has the appropriate risk profile and contribution/benefit outcomes.
Employers will now be working with other scheme stakeholders on rapid progress in three key areas, following the conclusion of the 2020 valuation:
- to explore whether alternative scheme designs, including Conditional Indexation, could make the scheme more sustainable in the longer-term and provide better value
- to develop a more flexible and lower-cost option for members to help address the opt-out rate
- to begin work on a governance review of USS.
You can read what these changes mean on the
October 2022 update
As a practical outcome of our commitment to joint working with UCU, the University made a submission with input from both UEG and ßÏßÏÊÓƵ UCU in response to the recent UUK consultation on USS governance, submitted 16 August 2022
Formal response of ßÏßÏÊÓƵ through the University Executive Group:
We welcome the opportunity to comment on the early stages of the Governance project. We do not have specific comments to make at this stage on the review proposals which seem sound and well argued.
We would however wish to feed back strongly our view that the successful pursuit of this project is dependent on increasing transparency and joint working with UCU to build a greater sense of trust and confidence in employer and member representatives.
The University Executive Group at ßÏßÏÊÓƵ and ßÏßÏÊÓƵ UCU are in agreement that the USS approach to valuation and consultation has led to an erosion of trust with scheme members. We support governance reform of USS in a way that adequately represents the views of employers and members; and, as part of the governance reform of USS, would want to ensure increased transparency in the decision-making processes of the Trustee.
ßÏßÏÊÓƵ UCU have shared with us their significant concern that the Governance review led by UUK with the ability of UCU to participate may not go far enough to create meaningful joint working which would help to rebuild trust with scheme members. Without increasing member and employer trust and confidence jointly with UCU through this process, we believe that any reforms may fall short of expectation and lead to continued reduced trust in USS.
We would urge UUK to prioritise practical measures to ensure that UCU have meaningful input into the review criteria, ongoing discussions of issues and build confidence that UCU and members views are at the front of considerations in any proposals for governance changes. One way this could be done is by having UCU and UUK as equal partners overseeing an independent and transparent governance review that adopts best practice and invites contributions from experts and stakeholders. This would be similar to approach of the Joint Expert Panel, which did succeed in building trust and gaining support across all stakeholders.
Contribution rates
From 1 April 2022 contributions into USS are 9.8 per cent for members and 21.6 per cent for employers.
|
|
Member contribution |
Employer contribution |
Total |
|
Rates effective from 1 April 2022* |
9.8% (unchanged) |
21.6% (+0.2%) |
31.4% |
|
Rates effective from 1 April 2024* |
9.8% (unchanged) |
21.4% (-0.2%) |
31.2% |
What’s happening now?
Webinars
We are updating staff through webinars. You can log in and view past webinars and read questions people have asked.
View a USS webinar recording
Watch a video:
Read the relevant documents and links relating to the valuation.
Who does what
There are four key stakeholders who have a role to play in a potential valuation outcome:
- The USS Trustee is responsible for the management and administration of the scheme and has a duty to act in the interest of all scheme beneficiaries. It is the Trustee that calculates and sets the required levels of contributions.
- Universities UK (UUK) represents all 340 participating employers in USS. It consults with them to determine a position whenever the USS Trustee issues information and is responsible for communicating the views of employers back to USS.
- The University and College Union (UCU) represents the scheme’s members. Along with UUK, UCU sends representatives to the Joint Negotiating Committee (JNC) to decide how the level of contributions required by the USS Trustee should be paid.
- The Pensions Regulator is a public body that protects workplace pensions in the UK, by working with employers and those running pensions to ensure that people can save safely for their retirement. A submitted valuation must meet the Regulator’s approval.