USS pensions: information and updates about proposed changes
The sector, USS Trustee and the Pensions Regulator are considering the outcome of an independent review of the financial health and cost of the USS scheme. We will publish further updates as information becomes available.
The Trustee of the Universities Superannuation Scheme (USS) are consulting on increases to the contribution rates paid by both members and the University to maintain the current defined benefit scheme going forward, after the most recent valuation concluded that it has a significant deficit and the cost of providing further defined benefits has risen.
You can read a timeline of the recent discussion points and latest news below.
18 May - University of Bristol USS employer consultation response
As part of the current UUK employer consultation on USS, the University has considered the views of our staff who are members of the USS pension scheme, or eligible to join. We have produced a response, shaped by colleagues, which can be read here UoB response - USS employer consultation response (PDF, 1,258kB).
We will continue to engage with UUK and the USS Trustee, and post further updates to keep colleagues informed.
19 April - Draft consultation response
We have written a draft response to UUK which explains our initial response to the questions they have asked us as one of the 340 scheme employers. We are holding consultation sessions this week to hear the views of colleagues who are scheme members (and those who are eligible to be) and will further shape our response based on your feedback to us before submitting.
13 April - Aon report March 2020 valuation
Aon explain their view of the recent pension valuation and the new pricing scenarios that USS are suggesting. Aon have produced an advice note, on what benefit reform options may be plausible to the USS Trustee, and stakeholders, taking into account the alternative covenant support suggested in the UUK consultation document issued on 7 April.
7 April 2021 - 2020 valuation employer consultation launches
The UUK employer consultation launched on 7 April and is officially open until the 24 May. Employers will engage their staff (who are USS members already or are elligible to be) during this period for a duration of their choosing.
We want to ensure your voice is heard at this important time to ensure a fair outcome is reached for members and employers. We will be submitting a collective response which considers your views to USS via UUK in May, and will make a draft version of this response available here on this webpage from midday on Monday 19 April.
As per our 30 March update, we will hold online consultation sessions on Tuesday 20 April and Thursday 22 April, from 1 – 2 pm on Teams – you will find more information about this in the Staff Bulletin (editions 1 and 8 April).
Please consider the impact of the latest on your view of the scheme and join Robert Kerse, Chief Operating Officer, at one of the sessions to hear an update and share your views on the suggested changes to the pricing and benefit structures, and future contribution rates. Please also view the other supporting documents from USS below, which give helpful context to the issues of covenant support
Alternatively you can email your feedback directly to Robert by Tuesday 27 April using COO@bristol.ac.uk.
USS supporting documents
30 March - 2020 valuation employer consultation: upcoming
The latest USS Trustee Section 76.1 Valuation Report (PDF, 1,138kB) published on 3 March indicates the need for reform to future defined benefits (benefits earned to date are protected) and likely increases to both member and employer contributions.
We are taking part in a national consultation in April, to ensure your voice is heard.
We will provide you with more information about how you can get involved shortly. As part of this, we will hold online consultation sessions for members of USS (and those who are entitled to be a member). Please consider the impact of the report on your view of the scheme and join Robert Kerse, Chief Operating Officer, to hear an update and share your views on the suggested changes to the pricing and benefit structures, and future contribution rates.
We are holding two sessions on Tuesday 20 April and Thursday 22 April, from 1 – 2 pm on Teams – you will find more information about this in the Staff Bulletin (editions 1 and 8 April).
12 March – Russell Group letter to The Pensions Regulator
Several Russell Group (RG) scheme employers, including the University of Bristol, raised concerns with the Russell Group over the level of involvement of The Pensions Regulator (TPR) in the most recent scheme valuation. There is uncertainty surrounding discussions between TPR and the USS Trustee, which resulted in the significantly increased illustrated pricing scenarios in the latest valuation report compared to the 2018 valuation and pricing communications relating to the 2020 valuation issued by the USS Trustee in December 2020.
RG Chief Executive, Dr Tim Bradshaw, and Chair, Professor Dame Rothwell, have jointly written to TPR asking for clarification on their discussions with the USS Trustee regarding the 2020 valuation and their influence over the illustrated findings of the latest report, and for this to be made available to RG employers.
Read the RG letter to TPR (PDF, 256kB)
9 March - UUK letter to the USS Trustee requesting formal review of Rule 76.1 report illustrated scenarios
After receiving significant feedback from scheme employers, Universities UK (UUK) wrote to Chair of the USS Trustee, Dame Kate Barker, to formally request the Trustee reviews the three illustrated re-pricing scenarios and explains more clearly how they have arrived at them.
The USS Trustee has responded to say that they are unwilling to review the current re-pricing scenarios until the employer consultation exercise (planned for April) has concluded and they have viewed employer feedback about covenant support measures and future benefit structures.
Read the UUK letter to USS (PDF, 269kB), and the response from USS (to follow).
Your University has previously raised the same points directly with USS earlier this month. Vice-Chancellor's letter to the USS Trustee (PDF, 187kB)
3 March 2021 - USS Trustee’s Section 76.1 Valuation Report
The USS Trustee has released a new report which sets out their assessment of the financial position of the scheme and suggests various pricing scenarios to maintain the existing benefit structure going forward. If ratified over thecoming months, these new pricing scenarios could significantly impact member and employer contribution rates. Some form of change to future pension benefits earned may also be required in response to significant cost increases. All pension benefits earned to date are protected. The report is based on a 2020 valuation exercise the USS Trustee has undertaken, with oversight from The Pensions Regulator.
Based on the assumptions and methodology used by the USS Trustee in its Report, we will be challenging the size of the scheme deficit and the pricing suggestions both directly with the USS Trustees and through UUK on your behalf. We do not believe the conclusions reached are well reasoned. They do not reflect the strength of the Higher Education sector and the mutual nature of the USS scheme where each employer stands behind the others.
Additionally, we are extremely disappointed that the USS Trustee has selectively addressed the recommendations of the Joint Expert Panel (JEP). The Trustee has added additional levels of prudence into the valuation over the last few months and has not yet provided a clear justification. Through UUK, we are asking for clarification from USS on the significant change in their position.
Our Vice Chancellor has sent a letter expressing our disappointment at the approach adopted by USS, including their limited adoption of the JEP’s recommendations, to the USS Trustees today.
Share your views
After the Easter holidays you will be invited to take part in a consultation on the USS Trustee’s Section 76.1 valuation report and the potential implications for members. We would like as many of you as possible to input to our University’s response to UUK (who represent the 340 USS employers) and USS.
11 November 2020 - our response to the latest technical provisions consultation for the USS 2020 valuation
Following our call-out in our last update (21 October) for contributions to our draft response to the latest employer consultation in relation to the Technical Provisions of the 2020 USS scheme valuation, we have now submitted our official response. You can view the final document below. Thank you to all who responded with your input.
We will provide a broader update on the 2020 valuation in due course, do look out for more information.
21 October 2020 - Draft response to the latest technical provisions consultation for the USS 2020 valuation
The University has prepared a draft response to the Technical Provisions consultation (Office document, 2,617kB) for the USS 2020 valuation.
The employer consultation - Technical Provisions (Office document, 225kB) seeks our views on:
• The inputs and assumptions for the 2020 valuation
• The methodology (this was the primary focus of the March Valuation Discussion Document), which we considered as a Group and responded to both UUK and USS with our views
• The risk management framework
• The figures for the Technical Provisions
• Whether employers are willing to agree to debt monitoring and pari passu arrangements and the long-term rule change required to support a strong covenant. (UUK will be issuing a separate consultation to employers on the proposed rule change to limit employer exits from the scheme)
Please read the draft reponse and the summary document explaining the consulatation, above. You are invited to share your feedback or questions with Robert Kerse via email email@example.com and attend the Staff Pensions Working Group at 10 am on Friday 23 October. Please email Robert to be added to the meeting.
10 September 2020 - our response to the USS consultation on new debt monitoring framework
In July, the USS Trustee consulted on new arrangements for the monitoring of debt levels among scheme employers, and the granting of priority status on any new secured debt.
These proposals were first discussed as part of the 2018 valuation. The trustee is proposing a framework under which it will work with USS employers to monitor debt and act, if necessary, to protect the pension scheme’s interests as a creditor and help support the case for a strong covenant assessment for the 2020 valuation.
The University has prepared a response to the USS consultation on proposed debt monitoring (PDF, 70kB), which was sent to both Universities UK (UUK) and USS in August.
You can read context about the consultation on the USS website, which links to a number of useful explanatory guides for further detail, including the debt-monitoring framework being discussed.
8 April 2020 - further USS employer consultation on the March 2020 valuation
The USS trustee produced a 2020 valuation discussion document (PDF, 700kB) for employers to consider and respond to. The document sets out USS' emerging thinking on the proposed methodology for the 2020 valuation and the key factors that will drive the outcome.
The document follows feedback from USS stakeholders, lessons learnt from the previous valuation, a fundamental review of valuation methodology, and the Joint Expert Panel’s (JEP) second report. In order to encourage and focus discussions, USS has set out their emerging approach to the methodology and investment strategy. They also set out the two key factors – the covenant and risk appetites – that will have the greatest effect on outcomes, whatever the methodology.
The discussion document is specifically addressed to USS sponsoring employers, which includes the University of Bristol. Our views on the issues the document covers will influence the approach USS subsequently decide to take and will help them to make clear, understandable and evidence-based decisions.
20 February 2020 - University divests from fossil fuel investment and signs joint statement to USS
Following a pledge made in March 2018 and being the first UK university to declare a Climate Emergency last year, the University is pleased to announce that it has completely divested from all investments in fossil fuel companies.
We have now joined forces with Bristol Students’ Union and the Bristol branch of the Universities and College Union (UCU), through a joint statement, to call on the national Universities Superannuation Scheme (USS) to divest from the fossil fuel industry in the next 48 months. Currently USS invests around £1 billion in fossil fuel companies
14 February 2020 - our response to the first consultation on the JEP2 Report and the upcoming 2020 USS valuation
USS held an initial consultation on the JEP2 Report and the upcoming 2020 valuation of the scheme. You can read the University's response to the consultation here. (Office document, 41kB). For context, you can also read the background to the consultation. (PDF, 375kB)
JEP2 is focussed on the process of the actuarial valuation of USS and its importance to the longer-term sustainability of the scheme. Actuarial valuations are essentially periodic financial health-checks. As part of the upcoming 31 March 2020 valuation, the benefit promises which have already been built up will be assessed, the level of deficit contributions will be set (should there be any shortfall in the projected funding for these benefits), along with the level of contributions required to provide for future pension promises.
23 December 2019 - joint talks on the future of the USS Pension Scheme
We are pleased to share an encouraging update that representatives of Universities UK (UUK), University and College Union (UCU) and Universities Superannuation Scheme (USS) will meet early in the year to consider and respond to the recommendations of the second report of the Joint Expert Panel (JEP) which was published 13 December.
Senior members of the organisations, including UUK Chief Executive Alistair Jarvis, UCU general secretary Jo Grady, and USS Group Chief Executive Bill Galvin, will attend talks which will be facilitated by the chair of the USS Joint Expert Panel (JEP) Joanne Segars.
The JEP was set up by UCU and UUK following the 2018 industrial dispute over the USS pension fund. The Panel comprises senior figures from the pensions sector as well as academic experts from within higher education and is chaired by Joanne Segars OBE.
Following its first report into the 2017 USS valuation, the Panel was commissioned by UCU and UUK to produce a further report aimed at establishing key principles to underpin the future joint approach of UUK and UCU to the valuation of the USS fund.
The Panel’s report makes a series of interlocking recommendations covering the governance of the Scheme, the valuation methodology and the way forward including:
- the establishment of a new, jointly agreed purpose statement and shared valuation principles;
- creation of a series of joint bodies within USS including a valuation forum and a high-level joint union/employer steering committee to agree issues relating to the future direction of the Scheme;
- improvements to the operation of the Joint Negotiating Committee, which comprises UCU and UUK representatives;
- agreement to a more appropriate valuation methodology driven by the agreed purpose of the scheme and a re-articulation of the Trustee’s, employers’ and employees’ risk appetites;
- the adoption of a dual discount rate approach to the USS valuation which would distinguish between past and future service, better reflect the demographics of the Scheme and automatically evolve as the Scheme matures; and
- investigation of different approaches to contributions in order to address the high level of Scheme opt-outs among younger and lower paid staff.
19 December 2019 - consultation response to the USS Temporary Monitoring and Action Framework
The USS Trustee concluded the 2018 valuation on 12 September 2019. Considering concerns raised over recent volatility in financial markets in the discussions with the Pensions Regulator over the 2018 valuation, the Regulator stated that it did not anticipate carrying out any further investigations, providing that the USS Trustee’s decision-making rationale and monitoring and action framework is robustly explained.
As a response, the USS trustee developed a ‘Monitoring and Action Framework’, to provide a basis for how the ongoing financial position of USS is measured. The framework will operate for a limited period, and new longer-term arrangements will be developed as part of the 2020 valuation.
The USS Trustee canvassed the views of USS employers and engaged with UUK. You can view UUK's responses on the USS webpage (see bottom of page), which includes two letters from UUK Chief Executive Alistair Jarvis following consultation with USS employers, including the University of Bristol. Our response is copied below.
Feedback from University of Bristol on USS Trustee’s proposed Monitoring & Action Framework for the 2018 valuation
We have nothing to add to the advice given to UUK by Aon which we fully support, other than ask that the USS Trustee informs on a timely basis all university participants when any of the metrics have been breached and the range of changes to contribution rates (if any) which the Trustees are considering in that situation.
30 September 2019 – confirmation of Option 3 for 2018 valuation
The USS Trustee Board met on 12 September 2019 and finalised the 2018 valuation in line with its proposed option 3 solution. This means contribution rates of 9.6% of salary paid by members of staff in this pension scheme and 21.1% of salary paid by the University. This increase commences on 1 October 2019 for two years (with potentially higher rates thereafter, subject to the outcome of the 2020 valuation).
There are no planned changes to employee benefits.
The University is committed to retaining the existing USS benefit structure at an affordable cost to staff. We are supportive of the employer offer to pay a further 0.5% of the contribution increases that will be implemented from 1 October 2019; however, this has not been accepted by UCU and therefore contribution rates for USS members will be as above.
The next valuation will take place as at March 2020 following the publication of the JEP’s Phase 2 report.
16 September 2019 - our position on the JEP first-stage report
We fully support the recommendations of the JEP's first stage report, which suggest that the total contribution rate for USS should be around 29.2%, as opposed to the 34.7% that the 2017 valuation process concluded. With the 2018 valuation drawing to a conclusion, the expected outcome is not quite where we believe that it should be. It is, however, better than the future contributions that are due in accordance with the 2017 valuation.
Unless an agreement can be reached soon, the scheme will default to the 2017 valuation, which sets out that staff member contributions will increase from the current rate of 8.8% to 10.4% in October 2019, and 11% from April 2020. Any increase in contribution rates are split between employers and staff members according to a ratio of 65:35 unless the Joint Negotiating Committee agrees an alternative approach.
UCU have rejected this ratio on the basis of its mandate to ensure that there is ‘no detriment’ to staff members. UUK (representative of all 350 USS employers) has made an offer, subject to agreement by the USS employers, that employers will pay for an additional 0.5% of the cost increase. This would mean that staff member contributions will only increase by 0.3% from next month if this is accepted by UCU. To date UCU has rejected this offer.
We fully support the employer offer to pay more on behalf of our staff. Employers paying a further 0.5% would bring the staff member contribution rate in line with recommendations of the JEP report. In our view it represents a fair balance of the increasing costs of USS between staff members and universities. For us, the additional 0.5% would cost a further £1 million per year – taking the total additional investment into USS pensions to £7 million from this year. With an operating budget this year that aims to break even, there is very little capacity to meet any further unplanned costs without going into a deficit position. We are fortunate to be in a position where this investment is possible – for other employers in the sector, this investment would mean difficult choices. There are 350 employers in the USS scheme, and everyone has to abide by a single arrangement. We do not have discretion to amend the future contribution levels that USS set. We will continue to lobby other institutions and UUK to improve the employer offer to staff to conclude the 2018 valuation.
13 September 2019 - JEP publishes its first stage report
The Joint Expert Panel has published its first report. You can read it, as well as a summary, on the USS website.
9 September 2019 - consultation on the Schedule of Contributions and Recovery Plan: our formal response
The University of Bristol supports the implementation of ‘Option 3’ and the proposed Schedule of Contributions and Recovery Plan for the 2018 actuarial valuation.
We would urge the Trustee to carefully consider the outcome of the Joint Expert Panel’s work and carry out a further valuation as at 31 March 2020 and ensure this is concluded prior to the planned contribution increase from 30.7% to 34.7% in October 2021; such an increase would require us to reduce our levels of investment in staff, student and research activities.
We remain concerned that current regulations around private defined benefit pensions schemes, the potential for long term adverse market trends, the absence of a Government guarantee for USS and future Government funding policy for Higher Education could result in the scheme becoming unaffordable to employers and staff members into the future. It is essential that all parties consider how the scheme could be developed in the future to respond to potential cost and risk management pressures and deliver staff, both current and future, with a means to save for a comfortable retirement.
3 September 2019 - USS Trustee consultation on changes to USS Statement of Investment Principles: our response
The University has responded to the USS Trustee consultation on changes to the USS Statement of Investment Principles. You can read the response here (UoB staff login required).
27 August 2019 - result of latest JNC negotiations and conclusion of the 2018 valuation
On 23 August, representatives of UUK and UCU met at the Joint Negotiating Committee (JNC) for a final round of negotiations to conclude the 2018 valuation. During the course of the discussions, UCU’s representatives on the USS Joint Negotiating Committee have chosen to reject an improved offer from employers on how to share the cost of contributions increases required by the scheme, citing concerns around the conditions attached to the offer. The committee eventually decided – through a casting vote by the independent chair – to conclude the valuation in line with UUK’s original proposal with the cost of increases shared 65:35, resulting in a rate of 21.1% of salary for employers, and 9.6% for members. This represents a slight reduction for members based on the contribution rate (10.4%) which was due to come into affect in October under the 2017 valuation schedule.
During the course of negotiations on the 2018 valuation, UUK’s representatives offered to pay an additional 0.5% for two years in return for no industrial action or ballots in relation to USS for the period to October 2021 – subject to consultation. This would have resulted in a lower member contribution rate of 9.1% which was what was proposed by the Joint Expert Panel in its first report, which UCU and UUK supported. UCU decided against this offer.
8 August 2019 - update on the 2018 valuation
Important discussions on concluding the 2018 USS valuation in line with ‘Option 3’ are currently in process this month at the Joint Negotiating Committee (JNC). This is to ensure the future financial sustainability of the Scheme and maintain current benefits. ‘Option 3’ requires a combined total annual contribution rate of 30.7%, with staff member contributions expected to be 9.6% with employers paying 21.1% of pensionable salaries unless the JNC agrees a different split. Staff members currently pay 8.8% but this is due to rise to 10.4% in October under 2017 valuation rules unless a new option is agreed. Universities UK (UUK) and the University and College Union (UCU) are continuing their discussions at the JNC to attempt to reach a resolution before the October rise.
Read the latest update in full. Member update on the 2018 USS valuation (PDF, 89kB)
You might also like to view a new 'at a glance' webpage to be linked shortly from the right of this webpage which explains key aspects of the USS Scheme and terminology, and compares the possible outcomes to concluding the 2018 valuation. Please check back to view.
22 July 2019 - USS consultation on the revised Statement of Investment Principles
USS have begun a new consultation on a revised Statement of Investment Principles (‘SIP’), which the Trustee (Universities Superannuation Scheme Limited or ‘USSL’) has prepared following the completion of the 31 March 2017 Valuation. The SIP outlines how investments which help build the USS pension funds are managed. We encourage interested Scheme members to review the revised SIP document below.
In summary, the Investment Principles have been simplified to improve accessibility (they were last reviewed and updated in 2016). The changes have been made in line with the Pensions Regulator’s guidance. There have been specific changes made to sections 1.4 and 1.5 in relation to responsible investments (which help fund the scheme) and the Trustee’s arrangements with investment managers, both within USSIM (the internal investment manager used by the scheme) and external managers (which are engaged where there is a beneficial use case).
Please submit your view on the changes and any comments to Jason Smerdon, Group Finance Director by Friday 16 August, using firstname.lastname@example.org
8 July 2019 - UUK Employer Consultation
A further UUK Employer Consultation 28 June (PDF, 198kB) was launched by UUK on Friday 28 June in relation to the 2018 valuation of USS. UUK have asked for our views on three key areas which USS wish to confirm before a decision is reached on resolving the 2018 valuation in line with Option 3. Our response is required by 16 July ahead the next USS Trustee meeting and the following JNC meeting. (Option 3 is the level of future employer and employee contributions conditionally favoured by 85% of scheme member institutions.)
Read an overview of the latest consultation process from UUK. UUK Employer Consultation 28 June (PDF, 198kB)
Read more about possible implications of this consultation and the rationale for our response. Response to UUK employer consultation (PDF, 122kB)
Our summary response to the latest UUK consultation is below.
'The University of Bristol is willing in principle to accept and support the package of proposed measures relating to managing employer exits to allow the covenant to be confirmed as “strong’ and to conclude the 2018 valuation, subject to considering the detail of the USS Trustee’s proposals. USS’ proposal in relation to the ranking of creditors is more challenging to support without seeing the detail; however, we are willing to progress the conversation with USS. In particular, we are concerned that the provisions relating to giving USS pari passu status with new secured creditors could have a detrimental impact on the covenant if it is not carefully considered. For example, some grant funders require security to protect their capital grant funding. Receipt of that funding helps promote the success of institutions. The detail of the new arrangements will be critical and we would like to join any working group that considers the proposals in greater depth.’
Please contact Robert Kerse, Chief Operating Officer, at email@example.com if you have any comments or questions in relation to this or more generally about the 2018 valuation of the USS pension scheme.
19 June 2019 - UCU dialogue and latest USS valuation update Q&A
UCU (University and College Union) have contacted the Vice-Chancellor to inform the University of their intention to encourage their members to take industrial action this autumn, if a 'no detriment' outcome to the current pension scheme contribution negotiations is not reached. 'No detriment' policy calls for no increase to employee contributions or cuts to scheme benefits. The Vice-Chancellor has responded to UCU to express our shared frustration at the current USS response to the ongoing valuation discussions, but to make clear that the University is legally bound under the Scheme Rules to adhere to the sharing of contributions between employer and employees and cannot pay any increase in staff contributions on their behalf. The University has also emphasised its strong support of the Joint Expert Panel and its continued work to find a better outcome to the 2018 scheme valuation and future contribution structure. The University was instrumental in the development of the concept of the JEP and has been an active partner in all calls for input to the recommendations the panel is putting forward to USS.
The Vice-Chancellor and Chief Operating Officer have invited the UCU Head of Education to meet to discuss these issues further.
Read the email correspondence between the University and UCU below.
Read the Q&A document below explaining the latest position on the USS 2018 evaluation and the three options currently available which were voted on by employers.
14 June 2019 - submission to the Joint Expert Panel
We contine to support the work of the Joint Expert Panel to bring independent thinking to the USS pension scheme at this important time. The JEP have again called for submissions on the scheme’s valuation process and governance while the outcome of the 2018 valuation is being considered. Please see the University's latest submission below. Thank you to all our staff who have contributed.
16 May 2019: USS Employer Consultation - our draft response
USS gave employers and UCU three options for future contributions last week. Future contributions need to be agreed as part of the completion of the 2018 valuation of USS over the next couple of months. A consultation with employers runs until the end of the month. You can read our Draft Response May 2019 (PDF, 82kB) and find details of the options and other information in our Finalising the USS 2018 Valuation - Q&A (PDF, 93kB) document. Please email firstname.lastname@example.org with any questions or comments.
If you would like to find out more and give your views to inform our final consultation response, please come to the meeting of the Staff Pensions Forum at 1pm on Thursday 23 May in room 1.14 at 1 Cathedral Square.
11 March 2019: UUK USS Employer Consultation Submission
This is the University’s submission to UUK’s consultation on the USS 2018 valuation Technical Provisions and Statement of Funding Principles. See the document linked below. The consultation response was prepared with assistance from the Staff Pensions Working Group and considered by the Board of Trustee’s Pensions Task & Finish Group before being submitted. This consultation exercise is a key part of the 2018 valuation process. The outcome of the consultation and how this will impact the scheme valuation and potentially the USS scheme will be known in a few weeks and we will provide updates as soon as we have them.
11 March 2019: Submission to the Joint Expert Panel
We are very supportive of the work of the Joint Expert Panel to bring fresh independent thinking to the USS pension scheme. The second phase of the Joint Expert Panel’s work is now under way and they have called for submissions on the scheme’s valuation process and governance. Please see the University's submission, below. Thank you to Dr Neil Davies for developing this paper.
28 February 2019: Update on the Universities Superannuation Scheme (USS) 2018 valuation
A new valuation of the USS Pension Scheme as at 31 March 2018 has now commenced and will be concluded on 30 June 2019. Once concluded this will effectively replace the 2017 valuation, but as the timetable is tight, the 2017 valuation remains the current plan and provides a backstop in the event of any delays in concluding the 2018 valuation. This current valuation has an aspiration to mitigate or avoid the planned cost-sharing increases for October 2019 and /or April 2020 that were agreed as part of the 2017 valuation.
The University is involved in a consultation exercise and meetings are taking place with stakeholders to help frame our response. This is a hugely important consultation and the University welcomes engagement from all staff to assist it in formulating its response to UUK.
The next meeting of the Staff Pensions Working Group is taking place at 12 pm on Wednesday 6 March 2019 in room 3.02 at 31 Great George Street. Everyone is welcome. Staff will be asked to input into the University’s response to the three questions on page 8 of the recent UUK Consultation Document (PDF, 141kB).
Some key points from our emerging response to the 2018 USS valuation are:
• The University continues to fully support the implementation of the Joint Expert Panel’s (JEP) Phase 1 recommendations in the USS 2018 valuation approach.
• We do not believe that the USS Trustee requires contingent support from employers to implement the Phase 1 JEP recommendations through the 2018 valuation as the USS scheme has a strong employer covenant with a long-term track record. The triennial valuation process and the ability of the Trustee to call for interim valuations in response to a material deterioration in the scheme funding position are considered adequate to enable the Trustee to achieve its long-term objective of ensuring that the scheme is fully funded and able to pay future pensions that members are entitled to.
• Introduction of a negative pledge upon employers to protect USS’ interests through restricting employers from entering into future borrowing or other creditor arrangements that would potentially prejudice USS’ interests upon an insolvency are not considered to be practical.
USS Actuarial Valuation at 31 March 2018 - Initial Thoughts (PDF, 313kB). A document giving a current view of the new 2018 valuation.
Aon Advice 2018 Valuation and Contingent Contributions (PDF, 1,710kB). Instructed by UUK, Aon have developed a proposal for the payment of contingent contributions to the USS, for consideration by employer
28 February 2019: Outcome of the Universities Superannuation Scheme (USS) 2017 valuation - contributions update
The 2017 valuation by the USS Trustee concluded on 31 January 2019 and will lead to the following changes for Employers and Employees (members) of the scheme. Confirmation comes after the Trustee Board considered Universities UK's (UUK) response to its consultation on the Schedule of Contributions and Recovery Plan - the final formal steps of the valuation process. Under the terms of the valuation, the University of Bristol’s contribution towards 'the match' will end from 1 April 2019 and total contributions will increase in three phases from the current 26% (8% members, 18%, employers) as follows:
1 April 2019 28.3% (8.8% members, 19.5% employers)
1 October 2019 32.9% (10.4% members, 22.5% employers)
1 April 2020 35.6% (11.4% members, 24.2% employers)
These increases will be managed centrally by the Payroll team – employees do not need to do anything directly.
19 December 2018: Update on the Universities Superannuation Scheme (USS) valuation
In response to both Universities UK’s (UUK) and University College Union’s (UCU) broad support for the Joint Expert Panel’s (JEP) recommendations – which offer an alternative solution to the cost-sharing approach – the USS Trustee has confirmed its view that that the most appropriate way to allow these views to be taken into account is for the 2017 valuation to be concluded, and for the USS Trustee to then conduct a new valuation as at 31 March 2018. The overall aim is to conclude the 2018 valuation by 30 June 2019 with agreed lower contributions, replacing the higher cost sharing contributions which would otherwise come into effect from October 2019.
The 2017 and 2018 valuation processes will progress over the coming weeks. As part of this, the USS Trustee will conduct two consultations with UUK, and through UUK with all scheme employers.
1. Schedule of Contributions and Recovery Plan consultations for the 2017 valuation
Firstly, the USS Trustee has commenced a consultation in relation to a recovery plan and schedule of contributions, which is required to conclude the 2017 valuation. This consultation is with employers via UUK. You can view the University's draft response to the UUK consultation (PDF, 104kB) and the proposed Schedule of Contributions (PDF, 83kB). Please provide Robert Kerse (Chief Operating Officer) with your views on the University’s proposed consultation response to UUK by the 9 January 2019 by emailing email@example.com. A meeting is being held with the local branch of UCU to discuss the University’s consultation response.
A consultation with staff members over the Schedule of Contributions was undertaken during the autumn and the USS Trustee has not altered its proposal.
2. Technical Provisions (and related) consultations for the 2018 valuation
A second sequence of consultations, in relation to the technical provisions and recovery plan for a new 2018 valuation, will commence shortly. We anticipate that the JEP’s recommendations will be taken into account by the USS Trustee, offering a potentially more favourable assessment of the funding position of the scheme, and cost of providing future defined benefits. This is a hugely important consultation and the University welcomes engagement from all members of the University community to assist it in formulating its consultation response to UUK. A meeting of the Staff Pensions Working Group is taking place at 1 pm on Monday 14 January 2019 in room 3.04 at 31 Great George Street. Everyone is welcome.
31 October 2018: UUK employer consultation on the JEP report recommendations
Following internal consultation with our employees, our response to Universities UK’s (UUK) consultation on the Joint Expert Panel’s (JEP) recommendation has now been approved by the University’s Board of Trustees. Feedback was gathered during six staff briefings held during September and October, followed by further consultation with our Staff Pensions Working Group and Senate.
Our response is as follows:
Question 1: Would your institution support the JEP recommendations regarding the 2017 valuation, in overall terms subject to the acceptance of such a position from the USS Trustee?
Our response: Yes.
Question 2: What further information would you need to provide a final view for Question 1?
Our response: None.
Question 3: Employers currently play 18% towards the USS scheme and the mandate agreed immediately following the Acas discussions was 19.3%. If the recommendations of the JEP were accepted in full by all parties, the outcome would be that existing benefits – minus the match of 1% - could be provided at an indicative employer contribution of 20.1% of salary (with a member contribution of 9.1%).
(a) Would you accept employer contributions at that level?
(b) If not, what balance of additional risk, higher contributions and/or benefit change would you prefer to see as an outcome?
Our response: Yes, we would be prepared to pay an indicative employer contribution of 20.1%.
UUK will consider the responses to the employer consultation on the JEP report from each of the 350 employers in the USS scheme in early November. UCU will also agree its response to the JEP report with its membership. UUK and UCU will then need to make recommendations to the USS Trustee through the Joint Negotiating Committee to determine how the JEP report recommendations are acted upon if they receive support from both the employers and staff through the union.
Separately, consultation with staff on the proposed contribution increases and cost sharing mechanism will conclude on the 2nd November 2018. Consultation with employers is due to commence in late November 2018. We will publish further updates when they become available.
13 September 2018: JEP report published
The JEP (Joint Expert Panel) established by both UUK and UCU to consider the financial position of the USS pension scheme has published its report today.
We welcome the findings of the report. They provide the sector with a constructive set of options with which to find a collective way forward for USS.
We need to digest the report and develop our response. We are hosting a series of open staff meetings in September and October where we plan to consider the current USS consultation about future contribution rates and the JEP report. USS members or staff eligible for membership are invited to attend. There is no need to book and dates and times are as follows:
- Tuesday 25th September 12.15 – 1.45 E29, Biomedical Sciences Building
- Wednesday 26th September 12.15 – 1.45 2D1, D Block, Priory Road
- Wednesday 26th September 3.15 – 4.45 Churchill Building Lecture Theatre, Langford
- Thursday 4th October 12.15 – 1.45 2D1, D Block, Priory Road
- Thursday 4th October, 3.00 - 4.00, The NBT Lecture Theatre, Ground Floor, L&R Building
- Monday 8th October 1.15 – 2.45 W415, Chemistry Building
3 September 2018: Consultation on changes to the Universities Superannuation Scheme (USS) pension scheme - 3rd September
A formal consultation on changes to the USS pension scheme will take place between 3rd September and 2nd November 2018. The key elements of the changes being proposed by USS at the present time are higher contribution rates and the removal of the 1% additional contribution match for members who are in the defined contribution section of the scheme.
Current members of USS and those eligible to join that pension scheme will receive a summary leaflet on the proposed changes to their home address.
An electronic version of that leaflet can also be found on the member website here: www.ussconsultation2018.co.uk
The website also contains useful information including full details of the proposed changes, impacts upon take home pay, videos and regularly updated FAQs. It also provides an area for members to leave their response to the consultation, which will comprise questions and free text.
Once the consultation period ends, the USS Trustee Board will consider all the feedback before confirming changes.
To support the consultation process, we will be hosting a series of briefing sessions in September and October supported by actuarial firm Mercer to update USS members and eligible members on the changes that are currently under consultation and a general update on the USS scheme. Staff interested in attending are not required to book in advance and the dates and times are as follows:
- Tuesday 25th September 12.15 – 1.45 E29, Biomedical Sciences Building
- Wednesday 26th September 12.15 – 1.45 2D1, D Block, Priory Road
- Wednesday 26th September 3.15 – 4.45 Churchill Building Lecture Theatre, Langford
- Thursday 4th October 12.15 – 1.45 2D1, D Block, Priory Road
- Monday 8th October 1.15 – 2.45 W415, Chemistry Building
13 August 2018: University of Bristol submission to USS JEP
The University developed its Submission to USS JEP (PDF, 30kB) with the Pensions Staff Working Group.
23 July 2018: Response to UUK consultation
Universities UK has sought views from employers about the USS Trustee’s plans to increase contribution rates. We have submitted our Response to UUK Consultation (PDF, 25kB).
16 February 2018: information and FAQs about industrial action
We have published information about planned industrial action by the UCU, along with FAQs for students and staff that we will keep updated.
29 January 2018: Vice-Chancellor's second response to staff
The Vice-Chancellor has written USS valuation response (PDF, 26kB) to a second letter co-signed by members of staff about the USS proposals.
20 December 2017: Vice-Chancellor's response to staff
The Vice-Chancellor has written a USS valuation response (PDF, 31kB) to a letter co-signed by 731 members of staff about the USS proposals.
14 December 2017: negotiation period re USS valuation
The University has today written to the employer representative (UUK) to say that it supports UCU's request that UUK negotiates beyond the current deadline of 18 December to help ensure that we have the best possible way forward for future USS pensions.
Negotiation between UUK and UCU does need to be completed relatively soon in order to facilitate a meaningful consultation with affected staff over any proposed changes to their pensions in the New Year and meet the Pension Regulator's deadline for the valuation to be completed by 30 June 2018. The Pensions Regulator has confirmed that there is no possibility of extending the 30 June 2018 deadline. You can read a copy of correspondence (PDF, 440kB).
Read the latest update on the conclusion of the 2018 USS valuation, after the recent meeting of the Joint Negotiating Committee (JNC) on 23 August.
To read the information in order, please see the drop-down updates listed by date on this page.
Two presentations are available following the publication of the JEP report and staff briefings.
Questions and Answers
USS JEP staff briefing Q&A (PDF, 157kB) (October 2018).
UUK has published FAQs for USS members (April 2018).