Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • October 2014
10

Universities make pension reform proposals

Open-access content Monday 13th October 2014 — updated 5.13pm, Wednesday 29th April 2020

UK universities have put forward proposals to close the Universities Superannuation Scheme’s (USS) £8bn deficit. These could see final salary benefits being closed to new members and a defined contribution element introduced for high earners.

2

Universities UK, the body representing universities in Britain, warned that the pension scheme was no longer affordable in its current form, arguing that 'reform is essential to address the deficit and the associated risk to the scheme to ensure it remains viable'.

There are two sections of the USS: the final salary section and the career revalued benefit (CRB) section.

Proposed changes include closing the final salary scheme for future service and stopping members from building up further benefit entitlements in this section.

For future service, all members of the USS will continue to receive defined benefits on the existing CRB scale of 1/80 of salary each year, plus tax-free cash of three times pension on their salary up to the proposed threshold of £50,000 a year provided that the cost is affordable for employers.

The factsheet, Employers' proposals for reform of USS said it was important to allow the highest number of USS members to accrue the 'whole or the majority of their benefits from the CRB section'.

It said: 'A proposed £50,000 salary threshold would mean that around two thirds of current members would receive a CRB pension on their whole salary.

'The remaining third would receive CRB benefits on salary up to the threshold with benefits on salary above that provided under the new defined contribution section.'

Member contributions of 6.5% and employer contributions of 12% of salary above the threshold would be invested in an individual account for each member with the proceeds available to provide benefits at retirement, Universities UK is proposing.

Anton Muscatelli, chair of Universities UK's Employers Pension Forum, said the proposed changes would deal with the massive deficit in the USS and mitigate the risk that contribution rates become unaffordable for both employees and employers.

He added: 'Any pensions already in payment or deferred in the scheme will not be affected at all by any of these changes, and past service accrued rights are protected by law.

'Whatever changes are eventually agreed, the employers will do everything they can to ensure that the USS remains an attractive and sustainable pension scheme for current and future members.'

The proposals will be subject to consultation with scheme members early next year. Any changes to the USS have to be agreed with trade unions before they can be implemented.

This article appeared in our October 2014 issue of The Actuary.
Click here to view this issue
Filed in:
10
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ