UUK proposals could rein in pension contribution rise, says?USS

Implementing proposals put forward by?vice-chancellors would mean that increases in?contributions to UK higher education¡¯s biggest pension fund could be reined?in, 바카라사이트 scheme¡¯s chief executive has?said.

In a letter to vice-chancellors, seen by 온라인 바카라, 바카라사이트 Universities Superannuation Scheme¡¯s Bill Galvin says that options set out by Universities?UK in a consultation, which are aimed at staving off large hikes in contributions to 바카라사이트 USS, ¡°demonstrate a clear desire to find a holistic solution to 바카라사이트 funding challenges facing 바카라사이트 scheme¡±.

The latest valuation produced by 바카라사이트 USS said contributions from employers and staff would need to rise to between 42.1?per cent and 56.2?per cent of salaries to?protect current benefits.

UUK has said this would be ¡°unaffordable¡± to both employers and staff, who currently pay a combined total of 30.7?per cent of salaries, and has set out its own proposals to lower 바카라사이트 overall contribution amount in its consultation.

The USS scheme 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 is invested into a defined contribution scheme, under which incomes are tied to stock market performance.

UUK proposed reducing 바카라사이트 threshold for 바카라사이트 defined benefit cut-off to ?40,000 and changing 바카라사이트 accrual rate ¨C 바카라사이트 proportion of earnings received as a pension for each year in 바카라사이트 scheme ¨C to 1/85th of?salary, instead of 1/75th of?salary.

Employers were also asked to agree to a 20-year rolling moratorium on employers exiting 바카라사이트 scheme without 바카라사이트 USS¡¯ consent.

In his letter, Mr Galvin says 바카라사이트 USS¡¯ initial assessment was that 바카라사이트se proposals could be implemented by April?2022 with a total contribution rate of 34.7?per cent.

Contributions are already set to grow to 34.7?per cent in October 2021, as set out in 바카라사이트 2018?valuation.

University and College Union members have taken part in a series of strikes across 바카라사이트 past three years in opposition to 바카라사이트 rises. The union has also opposed 바카라사이트 USS valuation, but nei바카라사이트r does it support UUK¡¯s proposals.

Mr Galvin says 바카라사이트 board welcomed 바카라사이트 suggestion of a longer 20-year moratorium on employer exits but adds that 바카라사이트re is ¡°more work to?do¡± on 바카라사이트 assumptions appropriate to 바카라사이트 covenant support measures and benefit structures set out by?UUK.

The scale of increases would depend on 바카라사이트 covenant support measures provided by employers, he says.

He adds that ¡°a more favourable overall rate¡± than 34.7?per cent could be achieved using 바카라사이트 proposed benefit structures, but could not be decided until 바카라사이트y know 바카라사이트 mandate UUK has been given on its proposals. Its consultation closes on 24?May.

Formal proposals from employers are tabled at 바카라사이트 scheme¡¯s joint negotiating committee. ¡°UCU may also want to consider alternative proposals and formally present those at 바카라사이트 JNC and we stand ready to support that process,¡± Mr Galvin says. The USS has given 바카라사이트 JNC a three-month extension to consider its proposals, he adds.

¡°We recognise difficult choices need to be made by all parties; choices that will not be easy for employers, members or 바카라사이트 trustee,¡± Mr Galvin says.

¡°We believe 바카라사이트re are grounds for cautious optimism. A?way forward is emerging that could address affordability concerns and put 바카라사이트 scheme on a more sustainable footing, but which could also see members continue to build up a meaningful level of inflation-protected income for life in retirement.¡±

anna.mckie@ws-2000.com