Proposed changes to Universities Superannuation Scheme (USS)
Background to the Proposed Changes
The trustees of USS must regularly carry out a valuation of the scheme's funding. A valuation establishes whether, at a certain date, the Trustees believe the scheme will have enough money to be able to pay the pensions that members are expecting, now and long into the future.
If the valuation shows that the scheme might not have enough money, for example because the investments your contributions fund have become more expensive, the Trustees must put a plan in place to improve its funding. By law, the Trustees need to take a prudent approach to assessing how much money they will need - and this is reflected in their conclusions.
The valuation for 2020 was based on a 'snapshot' of the scheme on 31 March 2020. However, the process itself continued to October 2021. The Trustees have now submitted the valuation to the Pensions Regulator.
To address the scheme's funding position and the increased costs of providing future defined benefits, the Joint Negotiating Committee (JNC) of USS, has recommended the following changes. These changes would take effect from 1 April 2022 unless stated otherwise.
Summary of the Proposed Changes
The proposed changes are summarised below.
- The Salary Threshold will reduce to £40,000
- The Salary Threshold will increase annually, but capped at 2.5% a year
- The accrual rate will reduce – changing from 1/75 of salary to 1/85 of salary
- Before you retire, the increases to benefits you've built up in the Retirement Income Builder will be capped at 2.5% a year
- After you retire, the increases to benefits you're receiving from the Retirement Income Builder will be capped at 2.5% a year
- Benefits could improve for members who leave the scheme with less than 2 years' membership, from 1 April 2022
- Note, your contributions won't change if the proposals are implemented from 1 April 2022
A formal consultation with affected employees and their representatives will run from 1 November 2021 until 17 January 2022.
The consultation is your opportunity to have your say on the proposals. You are encouraged to participate in the consultation process.
If you have not received any information about the proposed changes and you can access the full consultation information, you should contact email@example.com
The University ran a session for staff on Friday 12th November 2021 to assist and provide USS members with the opportunity to raise questions. If you were unable to attend any of the sessions you can view a recording of one of them here:
The slides are available here: USS Consultation 2021