Following the publication of the Report of the Joint Expert Panel on the USS valuation, UUK issued a consultation document for USS’s participating employers. The University of Bath response to the consultation on the JEP Recommendations is shown below. This has been agreed by the University Executive Board, Chair of Council and Treasurer, and sent to UUK.
- Would your institution support the JEP recommendations regarding the 2017 valuation (see Table 2 –page 10), in overall terms, subject to the acceptance of such a position from the USS Trustee (and TPR as appropriate)?
Yes. It is important for our students and staff that an acceptable, pragmatic and timely solution is found to the 2017 valuation. We recognise that a long term solution to the scheme’s sustainability and affordability is required, that this will take some time and will require further consideration by the JEP.
- What further information would you need to provide a final view for question 1?
We would like confirmation that the contributions rates indicated in the JEP example are accurate. Once the USS Trustee has issued a view on the JEP proposal we would want a clearer articulation of the increased risk that the USS employers would be taking and whether the USS Trustee has any additional requirements of scheme employers.
- Employers currently pay 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 employer 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?
Any increase in employer costs will have consequences for other budgets and will result in savings being required elsewhere within the University. The prospect of there being no solution to the 2017 valuation and the consequent increase of employer contributions to 24.9% as a result of USS Trustee being required to implement rule 76 would have severe consequences. A short-term increase to 20.1% would be more acceptable.
We note that this discussion is also taking place at a time of potentially greater financial uncertainty for the University Sector than has been the case for many years. Overall we consider it highly unlikely that an employer contribution rate of 20.1% is sustainable without a detrimental impact on students and other stakeholders.