USS delivers third option for 2018 valuation

Universities Superannuation Scheme (USS) has put forward three options in the hope of finalising the 2018 valuation, having considered the proposals of Universities UK (UUK) and its members.

Of the three options, two include the same contribution rates which were consulted on earlier in the year, while a new third option, with a contribution rate of 30.7 per cent, is now being offered.

According to the scheme, option one is a fixed contribution rate of 33.7 per cent, while option two is a rate of 29.7 per cent along with “significantly strong contingent contribution arrangements”, USS said it did believe UUK’s proposals went far enough in this option.

It said: “USS does not believe that the contingent contributions arrangement proposed by UUK provides adequate protection from short-term risks in its current form but has set out how it could be adjusted to for this option to be progressed.”

Under the option, members would pay 9.3 per cent of salary while employers would pay 20.4 per cent. Contingent contributions could be triggered in certain conditions which would see the overall rate increase annually by 2 per cent , up to 6 per cent, and would be subject to the 2021 valuation.

USS has said it has written to the UUK and the Universities and College Union (UCU) and the chair of the joint negotiating committee (JNC) regarding the options.

Commenting on the proposals, a UUK spokesperson said: “We are disappointed that the UUK/Aon contingent contributions proposal is not acceptable to the USS trustee.

“We are 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 JNC – to reach an agreement quickly, and before significantly higher contributions fall due in October 2019.”

Despite the new proposals, UCU said that none of the options “satisfy the unions ‘no detriment’ policy” which states members contributions should not rise and their benefits should not be reduced.

The union added it will be push is no detriment policy at the next JNC meeting on 17 May.

UCU 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.”

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