The proposed changes will:
- cost current and future members thousands of pounds a year in lost benefits
- close the final salary section of USS and move all into the career average scheme
- introduce a £40,000 earnings cap above which benefits will not apply
- the income from a new ‘defined contribution pot’ will depend upon investment performance and so cannot be guaranteed.
WHAT DOES THAT MEAN TO ME?
- lower benefits
- less guaranteed income in retirement
- a worse pension than that received by academic staff at new universities who are members of the Teachers’ Pension Scheme (TPS).
SO MEMBERS OF USS WILL GET LESS THAN COLLEAGUES IN THE NEW UNIVERSITIES IN TPS?
- Yes, on a like-for-like basis USS members will have significantly lower pension benefits than colleagues who are members of TPS.
- For example, someone aged 40 with 15 years scheme membership who retires at 68 on £45,954, their total benefits converted to annual pension would be 38.5% higher per year in TPS than in USS.
- This is likely to lead to recruitment and retention problems with staff opting for the employers who offer the best pensions.
IS USS REALLY IN DEFICIT?
- The next valuation is expected to show a deficit, but the USS projections involved are contested by UCU and we believe the employers’ proposals are an overreaction.
- Since 2011, the fund’s investments have grown by £8bn.
- Returns on investment have outperformed both average earnings and inflation.
- Last year the fund’s highest paid employee received a pay increase of 50% (to £900k) in reward for ‘sustained outperformance’.
ARE UNIVERSITIES STRUGGLING?
- No. Pre-92 institutions are doing well. There is simply no case for the pensions they offer to be inferior to those offered by new universities.
- Overall income for pre-92 institutions has grown by more than a quarter over the last five years
Staff costs as a proportion of income have continued to fall to now sit at 52.3%
The IWGB will be consulting over industrial action relating to this attack on many of our members’ pensions – let us know what you think, or ask at any questions at email@example.com.