USS valuation update

Dear Colleagues

Thank you to all of you who have engaged with the consultation on the recent USS valuation. Whether you came to the all-staff meeting, completed the survey or have contributed through your local Trade Union branches, it is very encouraging to see how much thought has gone into this difficult topic. The USS Trustee’s 2020 valuation of the pension scheme assesses that, to retain the benefits of the scheme, there will need to be very significant increases in the contributions made by both the employer and the employee. Universities UK has asked all employers for their views on these challenges.

Recognising the importance of early and ongoing engagement on the issue of pensions, in 2020 the University of Bath and the campus Trades Unions – UCU, Unison and Unite – formed a University Joint Pensions Working Group as a forum for discussion. We recognise that the University and the Trades Unions may not always have the same views on this topic. The aim, however, has been to ensure that any consultation responses can be as transparent as possible, while seeking to reflect as clearly as possible, common concerns about the scheme, such as the recent valuation.

With this in mind, members of the Universities Joint Pensions Working Group share the view that the level of increases proposed, based upon the recent valuation, will be unaffordable for many employees and the employer.

The USS pension scheme clearly must be affordable for employees and employers in the long term. We recognise that the cycle of cost increases and reductions in benefits is reducing confidence and that we need to develop long-term solutions. The valuation carried out by USS has been challenged by Universities UK and UCU at a national level for being too cautious in its assumptions and unfortunate in its timing. We share these concerns, which have not been adequately addressed by the Trustee. We therefore call upon the USS Trustee to provide greater transparency and evidence to support the assumptions in the valuation. In line with clear staff feedback during this consultation, we believe that the solution to a long-term, sustainable pension scheme requires a valuation which more accurately represents the strength of the Higher Education sector.

We are also very concerned that increases in costs impact those who earn least and who are earlier in their career. Also, any pricing of people out of the pension scheme increases the risks to the scheme in the long term.

Trust and confidence in the pension scheme has been damaged in recent years and we need to find ways to rebuild this. This may require changes to the way the pension scheme is governed and to the valuation process and therefore endorse the call for governance review.

As this process continues, we both understand that differences may arise between our positions on the valuation and that we will both need to retain our independence to ensure that we can both fully represent our respective areas. Nevertheless, we remain committed to a continuing dialogue and will continue to work together wherever we can to achieve the best possible outcome.