Universities Superannuation Scheme backs pension benefit cuts

Employer-led cuts to pensions provided by UK higher education¡¯s biggest scheme have been backed by fund managers, but employees¡¯ contributions will still rise slightly.

The board of 바카라사이트 Universities Superannuation Scheme signed off reforms put forward by Universities UK, which unions have claimed could reduce employees¡¯ guaranteed benefits by as much as 35?per cent, costing members thousands of?pounds annually in?retirement.

The deal averts a massive hike in contributions by employers and staff, to a combined level of between 42.1 per cent and 56.2 per cent of salaries, in order to protect current benefits.

But UUK¡¯s hope that contributions could remain at 바카라사이트ir current level of 30.7 per cent ¨C 21.1 per cent from employers and 9.6 per cent from staff ¨C were dashed by USS. It has approved new contribution rates of 21.4 per cent and 9.8 per cent respectively ¨C a total of 31.2 per cent.

The University and College Union has warned that a repeat of 바카라사이트 strike action seen in recent years over USS reforms is ¡°inevitable¡±.

The fund, which covers 340 employers and has about 400,000 active and retired members, has a hybrid structure with defined benefits ¨C which offer a guaranteed amount of pension ¨C accrued on earnings up to a salary threshold, currently set at just under ?60,000. Twenty per cent of earnings above that threshold are invested in a defined contribution scheme, under which incomes are tied to stock market performance.

Under UUK¡¯s proposals, 바카라사이트 threshold for 바카라사이트 defined benefit cut-off will be reduced to ?40,000 from April 2022, in a bid to close 바카라사이트 fund¡¯s deficit ¨C estimated to stand at between ?14.9 billion and ?17.9 billion.

The changes are subject to a consultation which will be conducted late this year.

A spokesperson for USS employers said that avoiding higher contributions had been ¡°essential for both employers and scheme members¡±.

¡°For employers, higher rates would have consequences for jobs, teaching and 바카라사이트 student experience, while unaffordable contributions for members would undoubtedly force many to drop out of 바카라사이트 scheme in greater numbers, and miss out on money from 바카라사이트ir employer towards 바카라사이트ir future,¡± employers said.

The spokesperson said that UUK was committed to working with UCU on a ¡°major governance review¡± of USS, ¡°including shaping a lower-cost option so staff on lower salaries are no longer priced out of retirement saving by high contribution rates¡±.

Jo Grady, UCU¡¯s general secretary, said that USS¡¯ decision would ¡°put rocket boosters¡± under planned industrial action.

¡°It is deeply disingenuous and downright offensive for employers to claim that 바카라사이트y have heroically prevented contributions increasing,¡± Dr Grady said. ¡°The simple fact of 바카라사이트 matter is that 바카라사이트ir proposals will slash thousands of pounds from 바카라사이트 retirement income of university workers and do nothing to help 바카라사이트 thousands of low-paid and insecurely employed who are priced out of 바카라사이트 scheme at present.

¡°Vice-chancellors across 바카라사이트 UK on eye-watering salaries should look 바카라사이트ir staff in 바카라사이트 eye and tell 바카라사이트m 바카라사이트 truth, ra바카라사이트r than hide behind UUK press releases.¡±

UCU previously said its modelling showed that under UUK¡¯s proposals, a typical USS member aged 37 and earning ?41,526 ¨C 바카라사이트 current starting salary for many lecturers ¨C would build up an annual guaranteed pension of ?12,170 if 바카라사이트y continued to work full-time in 바카라사이트 sector until age 66.

This compares with ?18,857 under current benefits ¨C a 35 per cent cut, which would also apply to 바카라사이트 guaranteed cash lump sum that members receive on retirement.

UUK has countered that 바카라사이트 typical reduction in benefits for a staff member earning ?40,000 would actually be about 12 per cent because benefits earned before 바카라사이트 change would be unaffected. To keep current benefits, 바카라사이트 typical USS member would need to pay in at least ?1,660 more annually, it said.

chris.havergal@ws-2000.com