UK Universities Back Fresh Funding Proposal For USS

USS trustees also asked for greater ability to monitor the debt situation of sponsoring employers, and to be given equal status on secured debt. UUK’s survey found the majority of employers supported the requests, but the organisation highlighted that this was a “collective, but not unanimous, view”.

Securing support from employers for a new funding plan means the trustees are a step closer to concluding the 2018 valuation. This was a revised approach after the 2017 valuation led to a proposal to shut the defined benefit section of the £68bn (€74.4bn) scheme, triggering nationwide strike action.

UUK also said the agreement would help a joint expert panel (JEP) – set up by UUK and UCU last year – to finish its second report on USS funding and feed in to the scheme’s next scheduled valuation, which would be based on data from 31 March 2020. 

However, the UCU has so far held firm in its belief that employees should not be made to pay for any contribution increases.

UUK, on the other hand, said the ‘option 3’ contribution level “takes employers to the brink in terms of their ability to sustainably maintain contributions to USS”. For most employers, it said, there would be “a need for strategic changes to plans and budgets”.

In addition, the UUK revealed that the Pensions Regulator – which has come under political pressure regarding its role overseeing USS – had “expressed concerns” about the employers’ preferred funding option.

The organisation said that “it seems that the trustee will have pushed the Pensions Regulator to the limit on its tolerance of risk” through selecting ‘option 3’.