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USS Pensions update

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Members will have seen in last week’s all-staff communication the reminder that our USS pension contributions will be going up from 8% of Salary to 8.8% of salary, as from your pay slip at the end of April. We will be receiving letters from the USS this week with further details. We have communicated this known forthcoming contribution a few times in updates on pensions in the last few months. This is the first of a series of increases in contributions that were triggered last summer as a result of a failure to agree the 2017 valuation – the source of the big pension strike this time last year. Further increases will take place if no agreement is reached – and you will see these mentioned in the USS letter and by following links from the all-staff email – but please note that there are no employers who desire these further increases and the pressure is on to come to a conclusion and agree a way forward to avoid them. Members will recall that the Joint Expert Panel was established on the back of our strike, and its first report came out last September. Partially in response to that, USS … continue reading

Might USS scrap the 2017 valuation, and replace it with a 2018 valuation?

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You will have received an email recently from Jill Nimmo, forwarding a USS communication in which they offer a brief summary of the cost-sharing consultation with members that took place over the summer, and which was in effect eclipsed by the publication of the JEP report in September. They refer to the JEP by all but name in a second paragraph headed ‘Alternative Proposals’, and point out that a subsequent survey of employers indicated that employers are broadly willing to adopt the JEP recommendations. They then point out that they intend to run a new valuation, dated at 31 March 2018. The implications of this new valuation need then to be consulted upon, and they explain that this will then mean that any new payment arrangements which could be agreed will be too late to be implemented, and the first tranche of the emergency increase in employer and employee contributions will come into effect in April 2019. This will mean an increase in member contributions from 8% or salary to 8.8%, and an increase of employer contributions from 18% to 19.5%. We presume that any subsequent agreed change to contributions as a consequence of the March 2018 valuation and  related … continue reading

A USS pension update

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Our University was one of the institutions that wanted us to lose Defined Benefits altogether.UCU National Disputes Committee adopts a ‘No Detriment’ positionUSS letter proposes using an updated March 2018 valuation to supersede the March 2017 valuation Our University’s position on last year’s UUK proposal to end to Defined Benefits Members at Leeds may have seen the recent release of the University of Leeds’s recent responses to UUK surveys of its members over the USS pensions scheme. What these documents tell us is that our University is among the most hawkish in willing an end to your Defined Benefit pension and that, in something of a volte-face given that early verdict, they have conceded that the UUK should adopt the JEP recommendations. We link to these documents at the bottom of this page.Michael Otsuka, who has been instrumental in commenting on and explaining the various vagaries of the pensions dispute, has described our recorded university’s position as “foaming at the mouth alarmist in their claims of DB” and pointed out that our employer was one of the minority that advocated a shift to 100% defined contributions – the base cause of last year’s strike. Professor Otsuka highlights the insensitivity of our … continue reading

No deficit = no detriment

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The latest development in the ongoing USS saga sees the revelation that USS themselves seem to have failed to correctly apply their own ’Test 1’, and that when this is corrected there is no deficit in the scheme as of March 2018. If there is no deficit, then there is no longer any argument for any change to our contributions or for any ‘benefit reform’, the euphemism we hear often which means changes to how much we receive in pension, and the means by which it is calculated. This seeming flaw has been exposed by Sam Marsh, a member of the Joint Negotiating Committee (JNC). ‘Test1’ and ‘self-sufficiency’ The USS have three tests which they apply in coming to a valuation.* Of these, Test 1 considers the viability of achieving a ‘self-sufficiency’ position in 20 years. ‘Self-sufficiency’ is, in effect, a position whereby all owed pensions can be paid without significant further contributions to the scheme from employers or employees. The Joint Expert Panel (JEP) expressed concern about Test 1 as “given too much weight in determining the valuation and its effects extend beyond its original purpose” (p. 8) and that specifically “Test 1 drives the investment strategy toward a … continue reading

Joint Expert panel report – a first response

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Yesterday, the long-awaited report from the Joint Expert Panel was released.  You can read the executive summary here , and the full report here. The report very much validates many of the arguments that UCU and activists have been rehearsing over the last year. Given the fact that the Panel was made up half of employer representatives and half of UCU representatives, it is perhaps notable that the conclusion are more in line with what UCU and First Actuarial have been arguing for many years than the statements we have seen from employers. UCU responded yesterday by saying that the report represents “a significant landmark in our ongoing campaign to defend members’ pensions.” Some key aspects of the report The JEP considered the manner in which the USS trustees use the ‘three tests’ to weigh up the affordability of contributions, and conclude that “too much weight” has been given to the long-controversial ‘Test 1’ which was now acting as a ‘constraint’ on benefit design and investment strategy, rather than guiding those decisions. The Panel state that USS had not given enough weight to the fact that our pension scheme is a large, cash-flow positive scheme and that the ’strength and … continue reading