Consultation on changes to run from 3 September until 2 November
I am writing to you regarding the forthcoming USS consultation. The consultation period begins at 9am on 3 September 2018 and ends at 5pm on 2 November 2018. USS has produced the consultation literature which will be distributed to all affected employees and trade union representatives this week. USS has developed a consultation website, ussconsultation2018.co.uk, which will contain additional details about the proposals and allow you to respond to the consultation.
The proposed changes to the USS scheme which are being consulted on are summarised here.
1. Removal of the USS Investment Builder employer matching contribution
Each active member of USS is currently given the option to select the 'match'; both the employer and member then pay an additional contribution of 1% of pensionable salary to the USS Investment Builder.
The employer's 1% matching contribution would no longer be payable from April 2019. The member match would continue and any members who currently take the match would continue to make their 1% contribution unless they elect to cease paying.
2. Member contribution rate
Active members of USS currently pay contributions of 8% of pensionable salary.
Under the proposals, active members would pay increased contributions as follows:
- 8.8% of pensionable salary from April 2019
- 10.4% of pensionable salary from October 2019
- 11.7% of pensionable salary from April 2020
The element of the member contribution which would be paid to the USS Investment Builder above the salary threshold (£57,216.50 for 2018/19) would remain at 8% throughout.
3. Employer contribution rate
Employers pay 18% of pensionable salary to the USS Retirement Income Builder, with 12% in respect of pensionable salary above the salary threshold being paid into the member's USS Investment Builder Account. The remaining 6% is used towards funding the deficit in the defined benefit section of the scheme, paying for the employer matching contributions, to pay for the scheme's running costs and subsidise the cost to members of investment management.
Under the proposals, employers would pay increased contributions as follows:
- 19.5% of pensionable salary from April 2019
- 22.5% of pensionable salary from October 2019
- 24.9% of pensionable salary from April 2020
The element of the employer contribution which would be paid to the USS Investment Builder above the salary threshold (£57,216.50 for 2018/19) would remain at 12% throughout.
You can read the USS Trustee's summary of the background to the proposed changes and the Trustee's statement on how the proposed changes will be implemented parallel to the workings of the Joint Expert Panel (JEP - the panel set up by UUK and UCU to examine the 2017 USS valuation). To find out more about the JEP, visit ussjep.org.uk.
To support the consultation, the University has organised a series of information sessions covering:
- the University's wider financial context, relating to changes in pay and the USS pension — presented by Jeremy Lindley, Finance Director
- the latest information and updates on the USS valuation and the formal consultation with affected USS members — presented by Mercer
The sessions will be held on:
- 4 September - Chemistry, C/A101, 10am
- 7 September - Chemistry, C/A101, 2pm
- 17 September - Chemistry, C/A101, 3pm
- 21 September - Law and Management, LMB/030 & 031, 11am
Further sessions added:
I hope that as many of you as possible will be able to attend the information sessions and that these will assist you to participate in the consultation process and submit a response through the USS online portal. If you have not received your consultation pack in the internal mail by the end of the week, please contact the Pensions Team at email@example.com who will be able to provide you with a further copy.
We will continue to provide further updates as they become available.
With best wishes,
Director of Human Resources