Universities Superannuation Scheme (USS) has launched an employer consultation on its proposed recovery plan and contribution schedule to tackle the scheme’s £6.6bn deficit.

Earlier this month (22 August) the Joint Negotiating Committee and university employers agreed plans to increase total contributions to 30.7 per cent, split between 21.1 per cent for employers and 9.6 per cent for employees.

University College Union (UCU) has rejected the plan to increase member contributions by 0.8 per cent and will open a strike ballot to scheme members on 9 September.

USS’s consultation is open until 9 September, which will allow Universities UK (UUK) time to consider the responses and respond to the USS trustee by 11 September.

The consultation detailed plans to issue the increase from 1 October 2019 to run until 30 September 2021, before increasing to 11 per cent of salary from 1 October 2021.

In a letter from USS chief executive, Bill Galvin, to UUK chief executive Alistair Jarvis, Galvin noted that “there is a real risk” that the trustee will need to “reconsider the contribution rates” at the end of the consultation and before the 2018 valuation is concluded.

The letter also revealed that the scheme’s deficit is now significantly higher than at the valuation date 31 March 2019, when the deficit amounted to £3.6bn.

UUK negotiators reportedly made an offer of increasing the employee contribution rate to 9.1 per cent to UCU on Thursday (22 August), but it included a ballot moratorium clause.

UCU negotiator, Nick Hardy, revealed that UUK included text in the offer which read: “'That UCU agrees not to proceed with the planned ballot for strike action on pensions and hold a moratorium on any pensions industrial balloting or strike action in relation to USS for the period to 1 October 2021.”

This reportedly made the offer unacceptable to UCU and the union still plans to vote on industrial action.

UCU has adopted an approach of ‘no detriment’ to members in its negotiations and wants employers to shoulder any increased costs.

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