USS pensions: further consultation on concluding the 2018 valuation in line with option 3

In the recent consultation on the 2018 USS pension scheme valuation, UCL was asked to express a preference for one of three proposed alternative contribution structures. After seeking the view of our staff, SMT and the Council, UCL offered reluctant support for option 3: A 2020 valuation approach. You can find full details of this on the HR website along with our new modeller which you use to see the impact of contribution increases on your take-home pay.

This view was shared by the majority of employers in the USS scheme and was put forward to the Trustee as a potential pathway to conclude the 2018 valuation. However, there are conditions attached to this option that need careful consideration. UCL expressed concern about these in its response to the previous consultation. 

In recent weeks, discussions have taken place regarding the Trustee’s requirements for option 3 and further information regarding the conditions has been provided. The conditions relate to proposed measures to ensure that the Trustee can maintain its assessment of the employer covenant as ‘strong’.

We have been asked to respond to another UUK consultation; specifically, we have been asked:

Is your institution willing to accept and support the package of proposed measures to allow the covenant to be confirmed as ‘strong’ and to conclude the 2018 valuation in line with option 3?

The proposed measures are:

1. A moratorium on employers leaving USS without the consent of the USS trustee for a period through to the completion of the next actuarial valuation (as at 31 March 2020).
2. A ‘firm commitment’ to meet the Trustee’s requirements in relation to debt monitoring and the prioritisation of USS as a creditor on any new secured debt.

As part of the last consultation, we indicated that UCL would be reluctant to support a rule change that would prevent employers from leaving the scheme. This is partly why the moratorium is being proposed as it will provide more time to consider a rule change and what may or may not be acceptable. More importantly, it will give time for the JEP to complete phase 2 of its work.

The Provost is keen to hear from you to help shape the UCL response. There is another short deadline, we have been asked to respond by 16 July.

We have created an online form for you to share your view, named or anonymously. Or if you prefer, please share your feedback through your Head of Department. All comments received by 10am next Monday 8 July, will be discussed with UCL Council who meet on the same day. All further comments received by 12pm on Friday 12 July will be reviewed before submitting UCL’s formal response.

As before, once the consultation has closed, our response, together with FAQs compiled from responses to the online form, will be available on the HR website.

Thank you again for sharing your views, and your ongoing commitment to helping shape UCL’s response. If you have detailed questions, the pensions team are on hand to support.