The Joint Negotiating Committee of the Universities Superannuation Scheme (USS), the principal final salary pension scheme for university and higher education employees, has confirmed that a package of proposals for benefit reforms from the employers would be recommended to the USS trustees on 22 July.
The conclusion was reached after independent chairman Sir Andrew Cubie exercised his casting vote in favour of the employers’ proposals.
Once the trustees have approved these changes, the USS will complete a full consultation with its employees for the remainder of the year with implementation to take place 1 April 2011.
The proposed changes include: the normal pension age for all active members should be age 65; employees that are 55 or over should be eligible for a flexible retirement scheme; the introduction of a career average revalued earnings section for new entrants; and an increase in the level of member contribution from 6.35% to 7.5%.
Professor Sir William Wakeham, chair of the Employers Pension Forum (EPF), said: “The EPF has always maintained that these changes are the minimum required for the scheme to have a sustainable long-term future.
“This change ensures that higher education institutions in membership of USS can continue to offer a good defined benefit scheme whilst containing cost pressures from a whole range of factors including increasing longevity.”
Sally Hunt, general secretary of the University and College Union (UCU), said: “We have made affordable and credible proposals to secure the future of the pension fund and we went out and made the case to members for their contributions to be increased.
“The employers’ proposals were overwhelmingly rejected by UCU members who voted on their plans. However, they seem determined to create a two-tier pension system with their draconian proposals, which would damage recruitment and retention of university staff and lead, inevitably, to further attempts to reduce benefits for existing staff to the lowest common denominator.
“If the employers’ proposals are to have any legitimacy then there must be a ballot of all USS members on both our proposals and the employers’ proposals. A token consultation exercise with just universities will not fool anyone.”
This decision is the latest development in more than two years of negotiations between the employers and the Universities and Colleges Union (UCU). The last reported figures from USS stated that the scheme has a deficit of £17 billion.
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