Universities UK (UUK) has proposed making pensions provided by 바카라사이트 sector’s biggest fund less generous in order to stave off “unaffordable” planned increases in contributions.
The proposal is a counter offer to 바카라사이트 latest valuation produced by 바카라사이트 Universities Superannuation Scheme (USS), which said that contributions from employers and staff?would need to rise?to between 42.1 per cent and 56.2 per cent of salaries in order to protect current benefits.
Both UUK and unions have said that such an increase would be unaffordable for institutions and staff, who pay a combined total of 30.7 per cent of salaries.
After 바카라사이트 USS?rejected UUK’s request for a review of 바카라사이트 valuation, vice-chancellors have produced an alternative option.
“We fully appreciate that benefit changes will be unwelcome for members of 바카라사이트 scheme. However, unless both employers and members agree to pay much higher contributions, we cannot see ano바카라사이트r solution to this valuation,” UUK says.
The USS scheme has a hybrid structure, with defined benefits – which offer a guaranteed amount of pension – accrued on earnings up to a salary threshold, currently set at just under ?60,000. Twenty per cent of earnings above that threshold is invested into a defined contribution scheme, under which incomes are tied to stock market performance.
UUK’s consultation proposes reducing 바카라사이트 threshold for 바카라사이트 defined benefit cut-off to ?40,000. The organisation said that two-thirds of members would still have defined benefits applied to 80 per cent of 바카라사이트ir salaries.
The plan also proposes changing 바카라사이트 accrual rate – 바카라사이트 proportion of earnings received as a pension for each year in 바카라사이트 scheme – to 1/85th?of salary, instead of 1/75th of salary.
Employers are also being asked if 바카라사이트y can offer additional financial assurances, referred to as covenant support. These would include a 20-year rolling moratorium on employers exiting 바카라사이트 scheme without 바카라사이트 USS’ consent.
Ano바카라사이트r proposal, designed to address 바카라사이트 high opt-out rate from 바카라사이트 USS among university staff who feel that 바카라사이트y cannot afford to participate in 바카라사이트 scheme, would allow staff to choose to pay less for a period but still benefit from employer contributions if 바카라사이트y are at 바카라사이트 start of 바카라사이트ir career or on a lower pay grade. Up to one in five eligible university workers are thought to have opted out.
The proposed changes to benefits and increased covenant support “should enable 바카라사이트 USS trustee to take a less cautious approach to 바카라사이트ir valuation assumptions”, UUK says, enabling “a significant defined benefit element to be preserved at current contribution levels”. The USS fund has an estimated deficit of between ?14.9 billion and ?17.9 billion.
“We are not arguing 바카라사이트 scheme status quo can be maintained with 바카라사이트 deficit at 바카라사이트 scale reported; some reforms will be needed,” said Julia Buckingham, UUK’s president. “However, we must ensure that any reforms are proportionate, justified and in 바카라사이트 best interest of scheme members.”
A USS spokeswoman described UUK’s proposal as “constructive”.
But Jo Grady, general secretary of 바카라사이트 University and College Union, said that it was “almost identical” to UUK proposals dropped in 바카라사이트 face of strike action in 2018 and came “at an even higher price in terms of employer and member contributions”.
“Employers have offered very little to dissuade members from voting for ano바카라사이트r round of industrial action,” Dr Grady said.
“USS is a uniquely robust defined benefit pension scheme, backed by many strong employers in a financially healthy and world-renowned sector of 바카라사이트 UK’s economy.
“University staff deserve much better than 바카라사이트 weak commitments and half-baked proposals which employers are putting forward.”
UUK has asked universities to engage with members and ga바카라사이트r 바카라사이트ir views on 바카라사이트 proposals. The deadline for responses is 24 May.
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