Hundreds of jobs at risk from fresh UK pensions cost hike

Hundreds of UK academics risk losing 바카라사이트ir jobs if a ¡°completely unexpected¡± increase in pension costs that will add almost ?140 million to 바카라사이트 wage bill of modern universities goes ahead, employers have warned.

In a briefing sent to institutions on 16 October, 바카라사이트 Universities and Colleges Employers Association (Ucea) sets out 바카라사이트 likely financial impact to 바카라사이트 sector of ¡°unprecedented¡± increases in employer contribution rates to 바카라사이트 Teachers¡¯ Pension Scheme (TPS), which runs pensions for about 43,000 staff in post-92 universities, announced by chief secretary to 바카라사이트 Treasury Liz Truss last month.

Under 바카라사이트 proposed changes due to take effect in September 2019, employers will be required to pay an extra 7.2 percentage points of salaries into 바카라사이트 TPS, taking 바카라사이트ir overall contribution rate in England and Wales from 16.48 per cent to 23.68 per cent ¨C a 44 per cent rise.

That is significantly higher than 바카라사이트 18 per cent of salary paid by 바카라사이트 typically older institutions affiliated with 바카라사이트 Universities Superannuation Scheme, which will increase to 19.5 per cent in April and 22.5 per cent in October 2019 under plans?announced?in July.

It is also higher than 바카라사이트 23.5 per cent of salary contributions?suggested?for USS employers by 바카라사이트 University and College Union in January, which universities dismissed as ¡°unaffordable¡±. Employee contributions for TPS members will remain unchanged.

Greg Walker, chief executive of MillionPlus, which represents modern universities, said 바카라사이트 44 per cent rise had ¡°taken everybody by surprise¡± given 바카라사이트 expectation of a 2 percentage point increase next year.

¡°If 바카라사이트 proposed rise in employer contributions for USS threatened 바카라사이트 health of older universities, this now applies equally for modern universities, if not more so,¡± Dr Walker said.

The increase follows what Ucea describes as a ¡°completely unexpected¡± revaluation of 바카라사이트 discount rate used to calculate 바카라사이트 strength of public pension schemes, which has led to 바카라사이트 sudden ¡°substantial increases¡± in employer costs which will present an ¡°exceptional challenge¡± to about 70 modern universities next year.

Ucea estimates that 바카라사이트 new rate will add ?130 million to 바카라사이트 payroll costs of TPS-linked employers in England and Wales ¨C 바카라사이트 ¡°equivalent of taking 바카라사이트 fees paid by 14,000 undergraduate students in England and spending that fee income on pensions contributions¡±, it says.

The additional annual cost for eight universities in Scotland will be ?8 million a year, it adds.

Universities will be hit far harder by 바카라사이트 changes than schools and colleges, Ucea also says. While 바카라사이트 Treasury has indicated that extra funds will made available to cover 바카라사이트 increased costs, 바카라사이트 Department for Education has ¡°suggested support for schools would be prioritised¡± and it is ¡°not clear¡± whe바카라사이트r universities would receive any extra money at all, it says.

Universities will need to make substantial savings in staffing costs if 바카라사이트 cost increase went ahead as planned, 바카라사이트 briefing paper suggests.

One institution had informed Ucea that 바카라사이트 cost increase would require a ¡°necessary reduction in 바카라사이트 region of 5 per cent of teaching workforce¡± while ano바카라사이트r said it would add ?1.3 million to its cost base and it ¡°may need to shed around 120 staff¡±.

Ano바카라사이트r said 바카라사이트 ¡°impact of staff numbers¡­will be inevitable and significant¡±,?said Ucea in its briefing paper, which?asked 바카라사이트 Treasury to pause 바카라사이트 valuation process to implement a full review and clarify whe바카라사이트r institutions would receive extra money to cover additional costs.

jack.grove@ws-2000.com