To address the future of the USS pension scheme, Universities UK (UUK) has extended itself to the University and College Union (UCU) via an open letter to discuss the future of the Universities Superannuation Scheme (USS) in a meeting on Tuesday, Feb. 27.
The letter, published Thursday, laments how the two groups have been in talks throughout 2017, inviting scheme members to “to take the opportunity to put forward any proposals you feel may not have been sufficiently considered.”
“Universities UK, as the representative of employers, has been in talks with the University and College Union (UCU) throughout 2017, and we have met more than 35 times since the start of 2017 to try to find a way forward,” the letter read. “The benefit changes that are proposed address the current issues with the scheme and also ensure that the maximum amount of the employers’ contribution goes towards members’ benefits. It is the best solution for this valuation to ensure the sustainability of the scheme.”
The letter also notes how Universities UK is open to changing the scheme in a way that reintroduces defined benefits, but only if there is improvement in economic and funding conditions. Some of the talks UUK would like to further discuss include exploring alternative models for risk sharing, a well-defined framework for the future re-introduction of defined benefit plans, how deficit recovery contributions can be kept as low as possible, and engaging with stakeholders on the implementation of any investment de-risking.
A two-month consultation will begin at the end of March, in which the UUK will solicit the views of any USS member as a way to consider proposals and attempt to consider “every possible angle.”
As for the meeting, UUK called for the engagement the following day, hoping to reverse the strike as quickly as it came.
“It is of paramount importance that both sides make every effort to meet—despite the ongoing industrial action—to stop any impact and disruption to students,” a UUK statement announcing the meeting read.
“Universities UK has never refused to continue to try to find an affordable, mutually acceptable solution. We would be willing to discuss a credible proposal that addresses the significant financial issues the scheme is facing. The problem that we share as interested parties in USS is that, to continue to offer current benefits, contributions would have to rise by approximately £1 billion per annum. The scheme has a £6.1 billion deficit and there has been an increase of more than a third in the cost of future pensions.”
After nearly a year of discussions about changing the defined benefit plans of USS members to defined contributions, which the UCU says would reduce benefits for a typical professor £10,000 per year, a strike against the actions began Thursday.
Although the scheme is facing a more than £6 billion shortfall, prompting the changes, the union was not only dissatisfied with the decision, but also the figure, as it called the evaluation method “recklessly prudent.”
Tags: Defined Benefit Plans, Pension, strike, Universities UK, University and College Union