Potential USS Pension Reform
Potential USS Pension Reform
Issued: Tue, 31 Oct 2017 09:21:00 GMT
There has been some speculation in the press recently about the USS pension scheme and whether there are potential issues regarding how it might be funded in the longer term. It is important that colleagues who are members of the scheme are kept updated and that as much information is available as possible.
Direct communications are sent to all members from the USS, monthly newsletters are issued by email from the University and articles like this one produced for MyGlasgow.
Under UK law, all pension schemes are subject to a valuation every three years. The latest USS valuation was carried out on 31 March 2017 and the outcome of that process will be submitted to the Pensions Regulator by 30 June 2018. The valuation exercise will determine the extent of any change in the funding position of the scheme since the previous valuation in 2014 – and what this might mean for members.
Changes to the benefits structure within the USS scheme, including increases to both employer and member contribution rates, were agreed in 2014. These changes reduced the fund deficit from £12.3bn to £5.3bn, with a 17-year recovery plan put in place that aimed to completely eliminate the deficit.
However, the challenging economic climate (in particular, the very low interest rates on government bonds, known as gilts) has continued to impact on the scheme and it is anticipated that the potential funding deficit will have increased. As a result further changes may be necessary. Discussions involving the USS trustees, individual universities, Universities UK and the Pensions Regulator have been taking place since the March 2017 valuation and will continue until the valuation outcome is submitted to the Pensions Regulator in June 2018.
What does this mean for members? The Trustee (USS) will consider, through the valuation process whether there is likely to be a need for further changes to future contributions by employers and members. Employers, represented by Universities UK (UUK) and USS members, represented by the University and College Union (UCU) may also consider whether the funding position merits looking again at the benefit structure of the scheme. Given the governance structure of USS, UUK and UCU can discuss potential benefit changes through the Joint Negotiating Committee (JNC) of USS.
The Employers’ Pensions Forum (EPF) of UUK met on Thursday 26 October 2017 to consider proposals for reform of the scheme. These proposals will now be considered by the UUK’s Board on 6 November 2017 and following that meeting it is expected that more details will be provided to members directly by USS.
The UCU has already begun a consultation process on this.
Once further details become available, the University will share all relevant information and updates with staff, including here on MyGlasgow.
In the meantime, for further information visit: The USS scheme
and a series of Frequently Asked Questions & Answers that can be found at: 2017 USS Valuation