Revaluation of uss pension scheme staff briefing
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Revaluation of USS Pension Scheme – Staff Briefing. April 2014 Richard Benson, Jo Brake-Oakes, John Garnham. Improving health worldwidewww.lshtm.ac.uk. USS – overview of the scheme. USS is one of the largest pension schemes in the UK with 300,000 members and around £40bn of assets

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Revaluation of USS Pension Scheme – Staff Briefing

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Revaluation of uss pension scheme staff briefing

Revaluation of USS Pension Scheme – Staff Briefing

April 2014

Richard Benson, Jo Brake-Oakes, John Garnham

Improving health worldwidewww.lshtm.ac.uk


Revaluation of uss pension scheme staff briefing

USS – overview of the scheme

  • USS is one of the largest pension schemes in the UK with 300,000 members and around £40bn of assets

  • Established in 1974 as the national pension scheme for HE

  • Mutual or “last man standing” scheme with 390 employers – HE institutions, FE colleges, learned societies and others

  • USS is an independent company governed by a board of trustees, including:

  • 4 members appointed by Universities UK

  • 3 members appointed by UCU

  • 3-5 independents appointed by the board

  • Any proposals to change the rules of the scheme will be considered by the Joint Negotiating Committee of 11 members:

  • 5 appointed by Universities UK

  • 5 appointed by UCU

  • 1 independent, who acts as chair


Revaluation of uss pension scheme staff briefing

USS – overview of the scheme

  • USS is a defined benefit scheme with two sections:

Career revalued benefits section

Open to members joining after Oct 2011

Final salary section

Open to existing members

Contributions

Contributions

Employer – pays 16% of salary

Individual – pays 6.35% of salary

Employer – pays 16% of salary

Individual – pays 7.5% of salary

Benefits

Benefits

Pension = average pensionable salary x 1/80 x pensionable service

Pension = final pensionable salary x 1/80 x pensionable service

+

+

Tax-free cash = 3 x pension

Tax-free cash = 3 x pension


Revaluation of uss pension scheme staff briefing

USS – revaluation

  • Pensions’ legislation requires all defined benefit schemes to conduct an actuarial valuation every 3 years

  • The valuation will assess the present value of the assets and liabilities of USS, including:

  • Will contain a large number of assumptions of how these factors & other may change over time

  • Small changes in assumptions can have a big impact on the size of the deficit

  • USS trustees will need to agree a Financial Management Plan with the Pensions Regulator to eliminate the deficit over a period of years

  • The Regulator will be looking at:

  • are the assumptions reasonable?

  • are employers able & willing to take the steps needed to reduce the deficit?

  • sustainability, including a new objective “to minimise any adverse impact on the sustainable growth of an employer”.


Revaluation of uss pension scheme staff briefing

USS engagement paper on scheme funding, January 2014


Revaluation of uss pension scheme staff briefing

Benefit Changes

Options?


Revaluation of uss pension scheme staff briefing

USS Valuation timeline


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