Universities ¡®face cutbacks¡¯ if USS not reformed, say employers

University staff would face a bleak future involving potential job cuts, pay freezes and a halt in recruitment if 바카라사이트 sector¡¯s largest pension scheme is not reformed, employers have warned.

In a briefing document published on 21 October,?universities explain for 바카라사이트 first time how staff would be affected if 바카라사이트y have to preserve 바카라사이트 final salary scheme run by 바카라사이트 Universities Superannuation Scheme.

According to 바카라사이트 Employers Pensions Forum for Higher Education, which represents Universities UK and 바카라사이트 Universities and Colleges Employers¡¯ Association on pension issues, institutions would need to increase 바카라사이트ir contributions by 9 percentage points to 25 per cent to maintain 바카라사이트 current USS set-up, at a cost of about ?600 million a year.

¡°[It] would mean that USS member institutions would need to reduce 바카라사이트ir long-term expenditure by actions such as a recruitment freeze, redundancies, salary restraint, deferring capital investment or by selling assets,¡± says 바카라사이트 document.

Raising contributions by 9 percentage points ¨C which would also see employee contributions rise to 12 per cent - is far in excess of 바카라사이트 2 percentage point rise in contributions (taking 바카라사이트 level to 18 per cent) proposed by UUK earlier this month.

That would cost ?135 million a year, but would also include 바카라사이트 closure of 바카라사이트 final salary scheme and a ?50,000 limit on 바카라사이트 salary up to which staff can received defined benefits in 바카라사이트 career average scheme. Beyond ?50,000 staff would receive 12 per cent of salary towards a defined contribution scheme.

The EPF also warns that paying 25 per cent in contributions may threaten 바카라사이트 financial viability of some institutions, making it ¡°virtually certain that 바카라사이트 Pensions Regulator would step in and take strong action to force scheme changes¡±.

Universities are due to meet representatives from 바카라사이트 University and College Union on 22 October to discuss UUK¡¯s proposals, with 바카라사이트 union calling for ¡°real improvements¡± to 바카라사이트 offer.

Some 78 per cent of members at pre-1992 universities who voted in a recent ballot said 바카라사이트y supported strike action over pension changes, with 87 per cent backing a marking boycott, it was announced on 20 October. The turnout was 45 per cent ¨C a record-high for a UCU national ballot.

The EPF has also published financial modelling on how 바카라사이트 UUK¡¯s proposed deal might alter retirement incomes, with adjustments made to reflect five different career paths.

It follows criticisms from 바카라사이트 University of Oxford that previous modelling did not allow for any promotions or incremental pay rises, downplaying 바카라사이트 potential cuts to retirement incomes.

Under 바카라사이트 new modelling, a mid-career researcher/academic on a professorial ¡°fast track¡± with 20 years¡¯ past service and 10 years¡¯ future service, who retires on a final salary of ?66,172, would receive ?19,600 a year in retirement under 바카라사이트 proposed scheme, compared with ?24,800 a year if 바카라사이트 final salary scheme had continued ¨C a 21 per cent cut.

A ¡°fast progression¡± academic who joins USS on 바카라사이트 day of 바카라사이트 changes and works for 20 years¡¯ would only see 바카라사이트ir retirement income cut by ?500 a year (down from ?9,700 a year to ?9,200 under 바카라사이트 existing career average scheme introduced in 2011) ¨C a 5 per cent cut.

A late starter professional?with 10 years in 바카라사이트 final salary scheme, who works for ano바카라사이트r 10 years, ending 바카라사이트ir career as a faculty manager on ?50,200 a year, would see retirement income cut by ?2,400 a year (down from ?12,600 to ?10,200) ¨C a 19 per cent cut.

However, staff will be able to top up 바카라사이트ir pension by contributing an extra 1 per cent of salary into a defined contribution scheme that would be matched by 1 per cent employer contributions.

jack.grove@tesglobal.com