USS board approves scheme changes
UK - The board of the £28bn (€33bn) Universities Superannuation Scheme (USS) last night approved changes that will see new scheme members paid career-average pensions rather than ones based on their final salary.
The decision brings to an end months of negotiations over the shape of reforms, which have been strongly opposed by the University and College Union (UCU).
The scheme's Joint Negotiating Committee (JNG) - consisting of five UCU and five Universities UK representatives, as well as an independent chairman - earlier this month voted to recommend the changes to the trustees, but only after chairman Sir Andrew Cubie was forced to cast his vote in favour when a deadlock emerged.
In a statement, the board noted Sir Andrew had used his casting vote in favour of the proposals, considering them to be in the "best long-term interests of the scheme as a whole".
The statement said: "After careful consideration of the JNC's recommendation, the trustee board confirmed its acceptance of the proposed scheme changes, concurring with Sir Andrew's view."
The proposed changes include increasing the retirement age to 65 for all new members and increasing employee contributions to 7.5% for final salary pensioners.
Additionally, measures will see future cost increases split between employers and employees, with latter paying 35%.
Increases to pensions in payment will now be linked to the consumer price index (CPI), with an annual 5% inflationary cap, while pensions in deferment will rise in line with the CPI or 2.5%, whichever is lower.
However, those joining the scheme after 1 April 2011 will only be offered a career-average pension and are therefore only required to pay 6.5% in contributions.
Damian Docherty of the Employers Pension Forum said: "Members understand the scheme needs to be reformed to secure its long-term future, and their input and feedback will be carefully considered as part of the consultation process."
He added the consultation process, which will take three months and run through December, needed to be "both robust and meaningful".