USS 2023 employer consultation

The proposals are a highly positive and important development- allowing for both a substantial improvement in USS scheme benefits and a reduction in contributions (for employees and employers). You can see UCL’s proposed response here which is aligned and supportive of the UUK/UCU joint statement in March.

We are highly supportive of a return to pre April 2022 benefits (where the defined benefit section of the scheme was more beneficial) for our staff. We are also supportive of the potential of reduced contributions which is outlined by USS. This is as a result of the cost of the improved benefits being priced lower by USS in this valuation than in previous valuations.

This implies more affordable contributions for employees and employers under the established cost sharing mechanism. We see this affordability as an important aspect which should avoid large proportions of staff (particularly early career) being priced out of the scheme - a key issue for intergenerational fairness. An expected employer cost reduction was also recycled back into the pay strategy changes that were recently announced. 

We call for the revised benefits to occur from April 2024 but that changes should be made earlier (potentially from January 2024) if possible. 

You will see that we are also supportive of augmenting and improving member benefits from April 2022 to the point at which benefits change. We support the use of current overpayments into the scheme since the valuation in March 2023 to fund this augmentation.

In the consultation we have reiterated our desire for investment returns to be achieved through responsible investment approaches which we know is important to staff in the sector.

We are aware that the valuation has swung from a deficit as of the last valuation into a surplus, and that more stability is crucial. This is in order to better protect benefit levels in future and reduce the volatility in contribution rates from valuation to valuation. As such we see stability as a key issue now and in the future. To that end we support the retention of the current scheme surplus to provide a degree of stability. To enhance stability further we support the review of the USS investment strategy as a critical and urgent part of the stability workstream as well as further exploration of other options to bring stability.

For now, we are focused on prioritising the increase in benefits which we know are important for our staff. We see the improved benefit structure at a lower cost as a significant step in the right direction for the reward of our employees- particularly when taken alongside the recent significant investment in our pay and reward strategy. 

Please do read the proposed response which needs to be submitted to UUK on 22 September and if you have any questions please contact Steven Cunningham-Sherret, Head of Pensions - s.cunningham-sherret@ucl.ac.uk by 19 September. 

Following this an employee consultation is due to open for staff on 25 September and that will run for six weeks. More details will follow soon and that will give USS eligible staff an opportunity to feed views into the future of USS- and we encourage you to engage with that.