Southampton University to close DB scheme to new members
The UK’s Southampton University has agreed to keep its defined benefit (DB) scheme open to existing members following a 60-day consultation with employees.
The university’s Pension and Assurance Scheme for Non-Academic Staff (PASNAS) will close to new members on 31 December 2018, with all eligible future employees transferred into a defined contribution (DC) scheme at the start of the following year.
However, while a spokesperson for the University of Southampton welcomed the decision, they warned that the move might result in higher monthly contributions from employees in the DB scheme.
“The decision to keep the pension scheme the same may mean that the university and PASNAS members have to pay higher contributions to maintain the same level of benefits,” the spokesperson said.
“However, the university has listened to feedback from eligible members and will delay any decision on potential future rises to contributions until the outcome of the 31 July 2018 triennial valuation is known.”
This process is expected to take between nine and 15 months to finalise, the spokesperson added.
For Unison, the UK union that represented the university’s non-academic staff in the consultation process, the move represented a “massive step in the right direction”.
“But we will keep campaigning for improved pensions for all,” said Adrian Dolby, a local Unison representative.
Glyn Jenkins, head of pensions at the union, added that the “significant victory… shows that when we engage enough staff, change is possible”.
Source: University of Southampton
Southampton’s decision comes in the wake of the ongoing row over the Universities Superannuation Scheme (USS), which has proposed to close the DB section of its hybrid plan to new and existing members.
Following strike action at various institutions organised by University College Union, Universities UK, which speaks on behalf of higher education employees, announced it would delay any further proposals until a review of the situation was completed by April 2019. The two bodies have since appointed a seven-person independent committee to scrutinise USS’ valuation.
Established in 1974, USS has approximately 400,000 members and at the last valuation on 31 March 2017 reported a pension deficit of £7.5bn – revised upwards from £6.1bn following the decision to review a possible DC solution.