On the go: Academics and employers have expressed their disappointment at the latest Universities Superannuation Scheme proposals in the long-running pensions dispute which saw universities brought to a standstill last year.
The Universities Superannuation Scheme’s 2018 valuation update issued on 9 May includes three options for finalising the valuation, but rejects the recent Universities UK’s contingent contribution arrangements proposal on behalf of employers as it does not believe that this provides adequate protection from short term risks.
The first two options include the same contribution rates that USS consulted on earlier this year (a fixed rate of 33.7 per cent – option 1, or 29.7 per cent with sufficiently strong contingent contribution arrangements – option 2). However, a third option of 30.7 per cent is now being offered, subject to a 2020 valuation.
The USS said the benefits currently offered to members would remain the same in all cases.
Its update stated: “Any of these options would achieve a significant reduction in the contributions required from 1 April 2020 under the 2017 valuation (35.6 per cent: 11.4 per cent from members and 24.2 per cent from employers; contributions are currently scheduled to increase in October 2019 to 10.4 per cent and 22.5 per cent respectively).”
Unless and until the 2018 valuation is finalised, the contribution changes previously announced under the 2017 valuation will be applied.
Commenting on the proposals, a Universities UK spokesperson said: “We are disappointed that the UUK/Aon contingent contributions proposal is not acceptable to the USS Trustee.”
The UUK is now consulting with employers to establish which of the trustee’s three options for concluding the 2018 valuation is preferred.
“It will then be vital for employers and members – represented by UUK and UCU at the Joint Negotiating Committee – to reach an agreement quickly, and before significantly higher contributions fall due in October 2019,” the spokesperson added.
The proposals found no favour with the academics. Their union University and College Union head of higher education Paul Bridge, said: “We have come a long way from the start of this dispute when we faced the end of the guaranteed pension at a cost to members of around £200,000 over the course of their retirement. While the union has made substantial progress in terms of avoiding the very large increases originally proposed by USS, none of the three options satisfy the union's no detriment policy position.”
