The USS Trustee has formally commenced a consultation asking employers for comments on the proposed deficit recovery plan to conclude the 2017 valuation.
The consultation also contains a draft schedule of contributions that confirms the planned increases arising from the USS Trustee’s default cost sharing process.
For the period up to 31 March 2019 employees will contribute 8 per cent of their salary, before increasing to 8.8 per cent from 1 April 2019 to 30 September 2019, up to 10.4 per cent from 1 October 2019 to 31 March 2020 before finally increasing to 11.7 per cent from 1 April 2020 onwards.
Employer contributions will also increase on the same dates, from 18 per cent to 19.5 per cent, up to 22.5 per cent and finally increasing to 24.9 per cent.
In a letter to Universities UK chief executive, Alistair Jarvis, USS chief executive officer, Bill Galvin wrote: “The Trustee acknowledges UUK’s recent consultation with sponsoring employers on the proposals made by the stakeholders’ Joint Expert Panel, which suggests there may be a material change in the views offered to the Trustee to date on such fundamental issues as market risks, investment strategies and contribution levels since the technical provisions consultation with UUK in September 2017.
“The Trustee recently confirmed that it would proceed with a valuation as at 31 March 2018 to address these more fundamental issues and expects to issue a technical provisions consultation to UUK in the coming weeks.
“However, the schedule of contributions and recovery plan that are the only matters left to resolve with UUK in the current valuation and there is very little scope to accommodate any significant changes in these final steps.
“More importantly, the statutory deadline for completing the 2017 valuation passed several months ago and the Trustee has been in breach of the law ever since.”
A further consultation on the technical provisions for the 2018 valuation, announced last month by the USS Trustee, is expected to begin with employers in due course.