Update on proposed changes to Universities Superannuation Scheme
20 April 2011
This note contains an important update on the progress to date of the proposed changes to the Universities Superannuation Scheme (USS).
Following the closure of the consultation exercise on 22nd December 2010 the USS Trustees reviewed the responses from scheme members and recommended to the Joint Negotiating Committee (JNC) of USS that a number of changes be made to the initial proposals. The JNC is made up of an equal number of members appointed by each of Universities UK and the Universities and Colleges Union (UCU). The role of the JNC is to initiate, consider and approve amendments to the Scheme. On this occasion the changes to the initial proposals were;
- Pension increases should move in line with the Consumer Price Index (CPI) up to a 5% threshold with a 50% slicing of increases above the 5% level up to an overall ceiling of 10% per annum, when CPI increases by 15%. The USS Board will retain the discretion to award increases above this level where scheme funding permits.
- The same level of inflationary increases will be applied to pensions in payment, deferred benefits (previously capped at 2.5% pa) and benefits built up in the CARE section of USS.
- Members of the final salary section who take a career break, for example to work with an overseas institution, will be able to re-join USS on the same terms as long as they do so within 30 months of their leaving rather than six months as originally proposed.
- Support staff who are promoted into USS-eligible roles will be given the opportunity to join the final salary section of USS, subject to their having been a member of a comparable scheme since before 1 April 2011.
The resulting recommendations of the Trustees were accepted by the employers' representatives and presented to the JNC at its meetings of the 2nd, 10th and 17th March 2011. Disappointingly, the UCU representatives chose not to attend any of those three meetings. The JNC was thus unable to confirm back to the Trustees that the initial proposals and amendments had been agreed. Regrettably, this means that the planned implementation date of the changes, 1st April 2011, is no longer achievable and has been delayed, which means the proposed increase in the USS employee contribution rate from 6.35% to 7.5% will not be effected in your April 2011 salary.
Discussions between members of the JNC and the Trustees have been undertaken to find a way through this decision making impasse. A meeting of the JNC is planned for the 10th May and the Trustees have requested that the employee representatives on the JNC ensure any alternative proposals to scheme changes, such as the above amendments, are readily available prior to that meeting.
Further information can be found on the USS pensions website.
Head of Payroll & Operation Services