USS pensions – is there really a big hole in the finances?
Many UCU members will have pensions in the Universities Superannuation Scheme (USS) and will remember that back in 2014 the scheme was changed (against our wishes) to replace the final salary basis with a ‘career average’ one, and an element of ‘defined contribution’ for salaries over a certain threshold. This reduction in pension benefits was a consequence of how the USS pension pot was valued – a strange and self-contradictory methodology which produced a large apparent ‘deficit’. At that time UCU campaigned against this peculiar valuation and against the changes to our pensions, with limited effect, and eventually members voted against further industrial action and the changes were imposed. At the time, we were concerned that if the methodology wasn’t changed, the same would happen at the next 3-year valuation in 2017. Lo and behold, that’s where we are now. Here’s the financial situation in a nutshell: Your pension scheme receives more money every year from members paying in than it spends in paying out pensions and costs. The current value of the scheme’s assets is £60.5 billion. The payouts last year were approximately 3% of that. The surplus is growing each year, and the investments have grown at a … continue reading