Dame Denise Holt, Chair of Council
Colleagues will have been aware that there has been considerable recent discussion about concluding the USS pensions scheme 2020 valuation. I wanted to provide you with an update on what has taken place. Sussex Council was asked to comment on two consultations in February. In the first we supported a transition inflation protection measure to defer the proposed 2.5% CPI cap on benefits increases.
In the second we were asked to consider a UCU proposal to close the 2020 valuation. Council received papers from both UEG and Sussex UCU, as well as briefing notes from Committee of University Chairs (CUC) and UUK. A briefing session in which (at their request) UCU representatives participated was held for Council members able to attend prior to a vote. The vote supported the following response to UUK:
“In response to the UUK supplementary consultation on USS, the University of Sussex does not support the UCU proposal to the JNC for increased contributions and for no benefit change, nor does it support the UCU three-point plan published 26 January 2022. We remain content that the UUK proposal, formally adopted by the JNC last Autumn and recently consulted on with members and representative bodies, provides a balanced, proportionate and legally deliverable response to the 2020 valuation. This response was approved by a quorate vote of the University’s Council on 18 February 2022.”
Sussex response in line with other employers
Sussex was very much in line with other employers in not supporting the UCU proposal. UUK have reported that 93 out of 97 employers responding to the consultation, representing over 92% of the active membership of the scheme (over 98% by weighting), did not support the UCU proposal to conclude the 2020 valuation. Three employers indicated conditional support for the UCU proposal, and just one (small) employer provided support. A variety of reasons were suggested for this, with most focusing on the matters of affordability and uncertainty around future higher contribution rates.
At the JNC on 22 February, the package of necessary reforms initiated by UUK on behalf of the scheme employers and approved by the JNC last August/September was formally approved. The UUK proposal was opposed by the UCU representatives but the JNC’s decision was confirmed with the vote of the independent chair. This decision of the JNC will next be considered by the USS Trustee in accordance with the formal processes under the scheme rules, and UUK hopes and expects it will be legally adopted when the USS Trustee meets on 25/2/22, thus avoiding the fall-back contributions which would otherwise have applied. The package decided upon at the JNC included the temporary deferment of the 2.5% inflation cap.
This has been (and remains) a very difficult issue for universities including for us at Sussex. It is deeply regrettable that some projected staff pension will decrease, and Council understands that these changes will be really hard for somecolleagues, with very disappointing [or with potentially worrying] implications for the future. However, the changes have been the subject of repeated consultations and reflect an overwhelming view among University governing bodies up and down the country that change is essential to secure the long-term financial sustainability of the scheme whilst retaining affordability for a larger number of staff.
What happens next
The University strongly supports the recently initiated work on reviewing USS governance and on lower cost/lower benefit contribution options to increase scheme participation. We are also keen to support work on reducing casualisation and pay inequality.
A reminder of where to find resources
We are keeping up-to-date information about the 2020 valuation on our website. This includes links to key documents published by the main parties, as well as recordings of previous webinars.
If you have questions about your individual pension or circumstances, please do contact pensions@sussex.ac.uk.
Dame Denise Holt, Chair of Council