Image: Fiona McIntyre for Research Professional News
Pension contributions could drop by a third after update from scheme suggests improved financial position
The amount of money that staff and employers pay into the Universities Superannuation Scheme could fall by a third in future, according to an update from the scheme trustee.
Universities and many of their staff have been locked in a bitter dispute over changes made to the benefits USS members receive on retirement, as well as an increase to how much is paid in. The issue is a major factor in the current University and College Union strikes affecting 150 universities.
Staff and employers currently pay a joint contribution rate of 31.4 per cent.
A key factor in the dispute is the financial health of the scheme, which is assessed in periodic valuations.
A financial-monitoring report published by the USS on 17 February found that more favourable market conditions could see the ‘technical provisions’ deficit—which topped £14 billion at the March 2020 valuation—pulled into a surplus.
USS chief executive Bill Galvin said the report “gives us grounds to look forward with cautious optimism” and that if the positive market conditions hold until the March valuation, “stakeholders might want to plan for the 2023 valuation on the basis that the overall contribution rate required for the current level of benefits is unlikely to be in excess of 20 per cent of payroll”.
If previous cuts to benefits were reversed then the rate would be around 25 per cent, the report suggests.