Universities UK (UUK) has published a consultation on University and College Union’s (UCU) proposed changes to the Universities Superannuation Scheme (USS) to conclude the scheme’s 2020 valuation.

The consultation, which runs until 18 February, is seeking employer views on UCU’s proposals regarding the valuation, covenant support and contribution rates.

Amid ongoing strike action, UCU recently published a number of proposed changes to the USS as an alternative to the proposals from UUK, after concerns that UUK's changes could result in a '35 per cent cut' to member's guaranteed retirement income.

UCU proposed that UUK calls on USS to issue a ‘moderately prudent, evidence-based valuation’ of the financial health of the scheme, as at 31 March 2022, to be issued for consultation in June at the latest.

It also called on employers to agree to provide the same level of covenant support as stated within their own proposals to facilitate a cost-sharing of current benefits throughout the 2022/23 scheme year.

This would begin on 1 April 2022 with contributions at 11 per cent for members and 23.7 per cent for employers, before increasing to 11.8 per cent and 25.2 per cent respectively until 1 April 2023.

From 1 April 2023, UCU has proposed that employers pay a maximum of 25.2 per cent and members pay a maximum of 9.8 per cent.

USS Employers, a site owned and managed by UUK, initially published the consultation with contribution rates that went above the maximums proposed by UCU, although it amended the publication on Sunday (13 February).

It had initially published the consultation with proposals that the employer contribution rate would increase past the 25.2 per cent every six months until it reached 29.1 per cent in April 2024, and that employee contributions would increase every six months to 13.9 per cent in April 2024.

USS Employers stated that, at a recent meeting with the Joint Negotiating Committee, UCU representatives “wished to confirm that it is their intention that employer contributions be capped at 25.2 per cent of pay from 1 April 2023”.

“The UCU representatives felt that their proposal was a significant move on their part from previous positions and would be popular with their members,” it stated.

“Their proposal is based on their strongly held belief that the next valuation will be significantly better and enable more flexibility in scheme design, noting that there is little evidence at this stage that this belief will be proven correct.”

However, USS Employers said that it remained “unclear” how the contribution cap would be legally and formally achieved, as it would seem “highly unlikely” that any new 2022 valuation described as moderately prudent, as proposed by UCU, could be considered in a timely manner to intercept the increases on 1 April 2023.

“In addition, the views of The Pensions Regulator on the UCU proposal are not yet known,” USS Employers continued.

“We understand that neither the USS trustee or UCU have had sufficient time to obtain The Pensions Regulator’s views on the UCU proposal. It is therefore unlikely that employers will have a view from the regulator ahead of the consultation on the UCU proposal closing.”

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