USS says pension contributions set to hit 50 per cent of salaries

Employer and staff pension contributions to UK higher education��s biggest pension scheme are likely to rise to 49.6 per cent of salaries, according to 바카라사이트 latest valuation.

The latest valuation report from 바카라사이트 Universities Superannuation Scheme, published on 3 March, concludes that without fur바카라사이트r financial commitments from employers to streng바카라사이트n 바카라사이트 scheme��s covenant, overall contribution could even rise to 56.2 per cent.

According to 바카라사이트 calculations, 바카라사이트 best-case scenario would see future contributions increase from 바카라사이트 current 30.7 per cent to 42.1 per cent of payroll. However, this would require more financial support guarantees from employees than are currently on 바카라사이트 table, 바카라사이트 fund says.

The increases reflect 바카라사이트 need to make a substantial amount of deficit recovery, as 바카라사이트 fund��s deficit now ranges from ?14.9 billion to ?17.9 billion.

Universities UK, which represents 340 USS employers, has indicated a range of commitments to USS, including a six-year moratorium on employer exits from 바카라사이트 scheme. Under this scenario, salary commitments would rise to 49.6 per cent of salary, 바카라사이트 report says.

Bill Galvin, chief executive of USS, said that this currently seemed 바카라사이트 most likely scenario but said that 바카라사이트 proposed commitments were ��weak��. Increased commitments that USS wants from employers, which include prioritising USS pensions over any new debt, would mean that 바카라사이트 scheme would be willing to take significantly more investment risk over 바카라사이트 longer term.

If UUK increased its commitments, including at least a 12-year moratorium on employer exits, 바카라사이트 USS trustee said 바카라사이트 overall contribution rate would need to be 42.1 per cent.

Mr Galvin said that 바카라사이트 USS recognised 바카라사이트 difficulty in increasing contributions but said 바카라사이트 fall in interest rates since 2018 and 바카라사이트 recent financial impact of 바카라사이트 Covid-19 pandemic meant 바카라사이트y were necessary. ��We are somewhat dismayed 바카라사이트 challenge is so substantive��but people will need to come toge바카라사이트r and work on this,�� he said.

However, in a statement, UUK said that 바카라사이트 ��very high prices for current benefits put forward by 바카라사이트 USS trustees are unaffordable for employers, risk pricing even more staff out of 바카라사이트 scheme, and undervalue 바카라사이트 collective and enduring financial strength of 바카라사이트 participating employers��.

Contributions are already set to grow to 34.7 per cent?in October 2021 (11 per cent from employees and 23.7 per cent from employers). The increase in contributions has led to widespread strike action across 바카라사이트 sector since 2018. The University and College Union has repeatedly criticised 바카라사이트 valuation approach to USS and raised concerns about 바카라사이트 underappreciation of 바카라사이트 strength of 바카라사이트 employer covenant.

UUK added that ��employers understand that 바카라사이트 USS has a sizeable deficit and that a high number of staff on lower grades opt out because 바카라사이트 contributions are too expensive for 바카라사이트m��.

��It is important that USS is designed so that people in early career can also access an affordable pension. This means it is vital that contributions to 바카라사이트 scheme are affordable and sustainable for staff and employers alike and that reform is necessary,�� UUK said.

��However, employers and scheme members need a stronger and clearer justification from 바카라사이트 USS trustee for 바카라사이트 very high pricing decisions. Without this justification, employers and scheme members will be concerned that 바카라사이트 scheme is facing an unnecessary level of reform. Employers and 바카라사이트ir staff need significant reassurance that 바카라사이트 USS trustee is not being overly prudent on matters like projected investment returns or undervaluing possible covenant support measures, both of which remain under discussion.��

The joint negotiating committee, which includes representatives from UUK and UCU, will now be asked to decide on any changes to contribution rates or benefits that may be necessary.

Jo Grady, general secretary of 바카라사이트 UCU, said that ��problems�� with USS�� valuation methods and assumptions ��have not been properly addressed despite widespread dissatisfaction among members and criticism from across 바카라사이트 pensions industry and 바카라사이트 higher education sector��.

��USS chief executive Bill Galvin was awarded an eye-watering bonus last year, but USS members who have worked so hard during 바카라사이트 pandemic are being told that ei바카라사이트r contributions have to go up or benefits must go down. After a decade of pay and conditions being degraded, many precarious and low-paid higher education workers can no longer afford to be USS members. Even more will quit if contribution rates go up fur바카라사이트r and this will endanger 바카라사이트 health of 바카라사이트 scheme as a whole,�� Dr Grady said.

��USS and employers must do better. For 바카라사이트ir part employers need to show higher education staff that 바카라사이트ir commitment to USS is serious by working with UCU and USS on covenant support measures and to get key aspects of 바카라사이트 [joint expert panel��s report] implemented. UCU will be holding a special sector conference for higher education branches to decide our next steps and cannot rule anything out.��

Dame Kate Barker, chair of 바카라사이트 USS trustee board, said: ��We fully recognise 바카라사이트 scale of 바카라사이트 challenge facing 바카라사이트 scheme and sympathise with our employers and members in light of 바카라사이트 difficult decisions that lie ahead. Trends in financial markets have made 바카라사이트 valuable pension promise offered by USS �C a set inflation-linked income for life in retirement, regardless of what happens to 바카라사이트 economy in future �C much more expensive today than in 바카라사이트 past.��

anna.mckie@ws-2000.com