Employer members of the Universities Superannuation Scheme (USS) are calling for the scheme’s 2023 valuation to be finalised quickly, so scheme members get the full benefit of lower pension costs in their take-home pay as soon as possible.
Universities UK (UUK) wrote a letter to USS noting the employers’ support for the USS trustee’s proposed outcome, and confirmed their support for the agreement reached earlier this year with the University and College Union (UCU), which represents scheme members, to lower contributions, improve pension benefits to the pre-April 2022 level, and explore a series of stability measures for the scheme.
In a UKK consultation with USS employers, the organisation received responses from 83 employers which together represent approximately 93% of the active membership of the scheme. These employer responses have been used to form UUK’s views and proposals for the USS’s trustee.
Acknowledging the cost-of-living challenges faced by members, and the significant financial pressures faced by higher education institutions, employers responding to the recent technical provisions consultation stressed the importance of reducing contributions to the level required as soon as possible.
”Employers welcome the fact that the scheme is in a much stronger financial position than at previous valuations, largely due to wider economic conditions. The scale of the transformation in the financial position is extraordinary, and employers have expressed some concern at the speed of change and the exposure to a further reversal in the scheme’s financial health,” Vivienne Stern, chief executive officer of UKK said in the letter.
However, Stern said that employers “wish to be cautious and proportionate” in making responses to this improved position and, not surprisingly, they identify improved stability as a cornerstone for the other decisions to be taken in concluding the valuation.
“We continue to work closely with the union and USS to fast track lower contributions and improve benefits. We hope these changes can be implemented as quickly as possible to help both scheme members and employers facing serious financial pressures,” she added.
“The significantly improved economic conditions for defined benefit pension schemes has led to this dramatic upturn in the scheme’s financial fortunes paving the way for these positive changes. We are also looking to the future by fully exploring, with USS and UCU, a range of options for creating greater scheme stability including alternative scheme structures and USS governance reform,” Stern said.
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