USS Pension Changes
Last changed 07 November 2014 by Susan Cooper.
The 2014 triennial valuation is almost complete and is expected to show that the deficit is even larger than in 2011 (not due to a decrease in the current value of assets but to the expected investment return for the future which is assumed in the valuation). In response to this, during the summer of 2014, UUK consulted with employers on some possible changes to the scheme, such as having future contributions for all members go into a hybrid scheme consisting of career-averaged defined benefit for annual salary below £40k and defined contribution for any part of salary above that.
The UUK information takes quite some digesting, so I provided an analysis including a 1-page summary at the beginning and an illustration of what the changes could mean for some sample career paths, and a spreadsheet people can use to vary the parameters. At the Oxford UCU meeting on 10 September I gave a talk and provided a handout with definitions and a summary.
Recently I have written a paper suggesting an agreement on constant contribution rates as a way of aligning employers' and employees' interests in devising the best pension for an agreed cost.
The University of Oxford posted various materials on an internal website:
- the summer 2014 UUK consultation paper
- papers from USS and EPF
- Oxford's response to the summer 2014 UUK consultation.
- revised employers proposals (9 Oct 2014), also available on the EPF website, which give £50k as the salary cap with employee contributions of 6.5% (the same as now for CRB members, less than the current Final Salary rate of 7.5%), with members allowed to make an additional 1% contribution into DC, which would be matched by employers.
UCU has provided:
- a paper with more details on the employers' proposal as presented to the JNC meeting (22 Oct 2014)
- the UCU proposals (6 Nov 2014) to keep an entirely DB pension with everyone in an improved Career-average scheme up to a salary cap (~£75k) that is revalued to include the full salary for 85% of members and no pension on any salary component above that. That paper also gives a discussion of the valuation issues, for which more details are in an exchange of letters between UCU and USS:
Within Oxford comments can be posted and questions asked on the Congregation discussion website.
Other sources of information include:
Comments are welcome. Susan Cooper
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