Message from Joss Ivory, Director of Human Resources

I would like to bring you up to date on two important areas that may affect you:

  • the current national pay award negotiations
  • the USS pension deficit.

National pay award

The University and Colleges Employers’ Association (UCEA), who are mandated to negotiate pay settlements on behalf of the sector, have made a final offer of 2% to the trade unions.

We understand that there has still not been a collective agreement on the national pay offer with the trade unions. We are therefore awaiting further information about the next steps, however we are anticipating there may be ballots for industrial action over the next few months. We await the outcome of the UCEA deliberations and the trade union ballots.

USS pension

The USS Trustee establishes how much money needs to be paid for the current level of benefits and, whether sufficient money will be available to pay out benefits when they are due. As many members will be aware, the USS Trustee reported that the March 2017 valuation showed:

  • the deficit in the scheme had increased to £7.5bn (assuming current benefits continue to be built up in the future)
  • the cost of building up future pension benefits had increased by approximately one third.

At Acas in March 2018, UCU and Universities UK agreed to establish a Joint Expert Panel (JEP) to consider this valuation. The JEP is anticipated to conclude its analysis in September 2018.

The USS Trustee must demonstrate to the Pensions Regulator (tPR) that it is taking all reasonable measures to conclude the valuation. The deadline by which the USS Trustee is obliged, under UK legislation, to complete the valuation process has now passed (30 June 2018).

As there are currently no proposals to reform benefits, the Trustee is proposing to implement rule 76.4-8, which sets out a process for imposing the increased costs on employers and scheme members on a defined cost-sharing basis (ie members paying in more than their current contribution of 8% of their salary to maintain a similar level of benefits). A consultation will take place with all affected members and their representatives on the proposition in the autumn, and a USS Trustees update has also been sent to members.

In summary:

  • There are no major proposals for benefit reform.
  • The Joint Negotiating Committee (JNC) will consider the JEP recommendations before deciding on any future changes. UUK and UCU will then consider its recommendations through the JNC, before deciding on any future changes to benefits and/or contributions.
  • The USS Trustee has advised that it is unlikely that any reforms arising from the JEP/JNC could be implemented by 1 April 2019. The timing of any reforms would depend on the complexity of the proposed change.

Information sessions

Given the intricacy of the USS pension negotiations, Human Resources and Finance are organising a series of information sessions, led by Mercer, an independent financial services consultancy.

Sessions will be organised to provide information for USS and non-USS members and will be structured to cover:

  • The University’s current financial position and the impact of changes in pay and pensions, presented by Jeremy Lindley, Finance Director (all staff)
  • The latest information and updates on the USS pension dispute and a formal consultation on behalf of USS for its members, presented by Mercer (USS members only)

The sessions will be held on:

I hope that as many of you as possible will be able to attend. We will provide further summary information after these sessions and of course, we will continue to provide further updates as they become available.

Joss Ivory
Director of Human Resources