USS prioritises work to restore pension benefits following funding improvements

The Universities Superannuation Scheme (USS) has prioritised work to restore benefits to pre-April 2022 levels, aiming to achieve a positive benefit change from April 2024, a statement from University College Union (UCU) and Universities UK (UUK) has revealed.

UUK and UCU previously committed to prioritising the improvement of benefits to pre-April 2022 levels, where this can be done in a demonstrably sustainable manner, after a monitoring update suggested that the next scheme valuation could provide scope to improve benefits and reduce benefits.

Following this, UUK and UCU issued a joint statement to provide an update on the progress on this work, confirming that UCU made a request at the March Joint Negotiating Committee for USS to provide pricing to restore benefits to pre-April 2022 levels as a central premise for the 2023 valuation, with UUK fully supporting this request.

This was done in anticipation of the USS trustee confirming its pricing to allow for an improvement of benefits and a reduction in contributions.

The UCU and UUK also confirmed that the scheme trustee has agreed to prioritise this work within the accelerated valuation timetable, with a view to achieving positive benefit change from April 2024.

UCU and UUK have also agreed to develop and implement a robust and transparent mechanism for managing risk which can provide more sustainable benefits and contributions for future valuations.

In addition to this, although returning to pre-April 2022 benefit levels in full requires a statutory member consultation, UUK and UCU have agreed to work together "at pace" on preparing and issuing a joint member consultation over the option of full restoration.

The statement also provided an update on the commitment on valuation methodology, revealing that UUK and UCU have agreed to continue collaborative work within the Valuation Technical Forum, exploring and evaluating the assumptions USS will use for the 2023 valuation.

"This work is ongoing and we appreciate the engagement across the USS trustee board and executive in this work," it stated. "We are jointly preparing further follow up work including engagement with the USS trustee board on developments for greater transparency.

"UCU and UUK will also explore the options and costs of augmenting benefits in recognition of the lower benefits accrued between April 2022 and April 2024, within the 2023 valuation timetable.

"We reiterate our shared agreement to a scheme governance review.Our negotiations continue to be constructive."

Commenting on the recent progress further, a spokesperson for UUK, on behalf of USS Employers, stated: “The improvement in the financial position of the scheme, and particularly the dramatic swing from the situation it was facing only a year ago has been remarkable.

"While the wider economic climate remains challenging, the current funding position is good news for USS scheme members and employers alike.

“Rapidly rising interest rates were a big driver of that improvement, but the benefits changes made in April 2022 also played a significant part in stabilising the scheme’s finances.

"Employers were always clear that, should the situation markedly improve then we would work with the trustee on how those benefit changes might be reviewed at future valuations.

“We are pleased to have continued to have collaborative and constructive talks with the union at the JNC on our shared commitments for the future of the scheme.

“With the support of the USS trustee we have been making significant progress in these areas and look forward to continued constructive negotiation with the UCU.”

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