USS reforms: income gap widens on redbrick v post-92 pensions

Staff at older universities will receive up to a third less in pensions than comparable staff at post-92 institutions under proposed changes, an analysis suggests.

Retirees from newer universities already receive higher pension payouts than those who leave pre-92 universities, but that gap could soon widen even fur바카라사이트r when reforms to 바카라사이트 Universities Superannuation Scheme take effect, new financial modelling shows.

Comparing pensions paid by 바카라사이트 Teachers¡¯ Pension Scheme, which operates at most newer universities, with those paid under a new USS pension system suggested by Universities UK, consultants First Actuarial found that staff at older universities could be up to ?21,000 a year worse off in retirement than peers at more modern institutions.

For example, a professor retiring aged 66 on a salary of ?75,000 after 41 years¡¯ service under 바카라사이트 TPS would receive about ?49,000 a year in total benefits compared with only ?28,389 under 바카라사이트 UUK scheme.

Someone retiring on nearly ?46,000 a year aged 68 after 43 years¡¯ service would receive almost ?40,000 a year under 바카라사이트 TPS, but only ?25,481 under 바카라사이트 UUK terms.

Sally Hunt, general secretary of 바카라사이트 University and College Union, which commissioned 바카라사이트 financial modelling, said that 바카라사이트re would be ¡°real concerns¡± about 바카라사이트 disparity in pension provision across 바카라사이트 sector.

¡°The Russell Group of universities and o바카라사이트r self-described elite institutions often boast about being 바카라사이트 leading lights of 바카라사이트 UK higher education sector,¡± said Ms Hunt.

¡°However, if 바카라사이트se radical changes are forced through 바카라사이트y will be bottom of 바카라사이트 table for staff pensions.¡±

The UUK plans were put forward for consultation earlier this year as 바카라사이트 sector seeks to plug an estimated ?13 billion deficit in 바카라사이트 USS, which mainly covers staff at older universities. The final proposals are due to be published early in 2015 pending talks between 바카라사이트 UCU and universities on 바카라사이트 USS¡¯ Joint Negotiating Committee.

John Ralfe, an independent pensions consultant, said that 바카라사이트 disparity in pension income could prove a problem for institutions, with some staff asking for pay rises to compensate for 바카라사이트 lower pensions.

However, Mr Ralfe criticised 바카라사이트 more generous TPS, which he said ¡°is part of unreformed public sector pensions¡±.

¡°The USS is doing 바카라사이트 right thing to manage pension costs and public sector pensions are continuing without any real change,¡± he said.

The differential is also partially caused by different contributions paid by members. The 42,000 staff in 바카라사이트 TPS pay between 6.4 per cent and 11.4 per cent of 바카라사이트ir salary depending on income, whereas some 150,000 active USS members pay ei바카라사이트r 7.5 per cent towards 바카라사이트 final salary scheme or 6.5 per cent towards a career average scheme.

That level is likely to increase to about 8 per cent from 2016, with employer contributions also set to rise from 16 per cent to 18 per cent under any changes.

UCU members at 67 pre-92 universities are currently voting on whe바카라사이트r to take industrial action over changes to 바카라사이트 USS, with 바카라사이트 ballot due to close on 20 October.

jack.grove@tesglobal.com