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
    • Moody's - Climate Risk Insurers series
    • 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

You may also be interested in...

2

UK places ninth in Mercer's global pensions league table

The UK’s pension system is ranked ninth best in the world, according to a global index published by retirement consultants Mercer.
Monday 13th October 2014
Open-access content
2

DWP sets out plan to end NEST saving limits

The Department for Work and Pensions has today published draft laws that will remove the annual contribution limit and transfer restrictions on pensions schemes held with the National Employment Savings Trust (NEST) by April 2017.
Thursday 9th October 2014
Open-access content
2

Citizens Advice and TPAS to provide free pensions guidance

Citizens Advice has been chosen as the expert provider of free face-to-face pensions guidance, following the government’s announcement of new pension rules, it has emerged.
Monday 20th October 2014
Open-access content
2

Osborne announces further pensions liberalisation

Pensioners will be allowed to withdraw money from their pots in stages while retaining tax advantages, Chancellor Gorge Osborne has said.
Tuesday 14th October 2014
Open-access content

NAPF urges government to create 'commission for pension savers'

The National Association of Pension Funds has called for the creation of an independent commission to oversee future legislation on saving for retirement.
Wednesday 15th October 2014
Open-access content

TPR plans new guidance following pension reforms

The new chair of The Pensions Regulator is to announce the organisation will provide new guidance to the scheme trustees as the government’s wide-ranging reforms are implemented across the sector.
Thursday 16th October 2014
Open-access content

Latest from Pensions

ers

By halves

Reducing the pensions gap between men and women is a work in progress – and there’s still a long way to go, with women retiring on 50% less than men, says Alexandra Miles
Thursday 2nd March 2023
Open-access content
rdth

Make My Money Matter's Tony Burdon on the practical power of sustainable pensions

Years working in international development showed Tony Burdon, head of Make My Money Matter, that sustainable pensions can harness trillions of pounds to build a better world – at a scale governments and charities can’t. He talks to Travis Elsum
Wednesday 1st March 2023
Open-access content
KV

Liability-driven investments: new landscape

What now for liability-driven investments, after last year’s crash in the market? Pensions experts Rakesh Girdharlal and Moiz Khan say it should lead to a more balanced approach
Wednesday 1st February 2023
Open-access content

Latest from October 2014

ABI: motor insurance costs continue to fall

The cost of comprehensive motor insurance fell to £356 in the third quarter of this year, down £2 on the second quarter, according to the Association of British Insurers.
Friday 31st October 2014
Open-access content

'Marked improvement' in PPF scheme deficits

Pension schemes that are members of the Pension Protection Fund saw a ‘marked improvement’ in their deficit over the last year, according to an analysis published today.
Thursday 30th October 2014
Open-access content
2

Climate change experts urge flood-risk reduction plan

The government and insurers should collaborate on a plan to reduce flood risk, the official advisory committee on climate change has said after finding that the uptake of sustainable drainage systems (SuDS) in new development was low.
Wednesday 29th October 2014
Open-access content

Latest from small_opening_image

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from 10

ABI: motor insurance costs continue to fall

The cost of comprehensive motor insurance fell to £356 in the third quarter of this year, down £2 on the second quarter, according to the Association of British Insurers.
Friday 31st October 2014
Open-access content

'Marked improvement' in PPF scheme deficits

Pension schemes that are members of the Pension Protection Fund saw a ‘marked improvement’ in their deficit over the last year, according to an analysis published today.
Thursday 30th October 2014
Open-access content
2

Climate change experts urge flood-risk reduction plan

The government and insurers should collaborate on a plan to reduce flood risk, the official advisory committee on climate change has said after finding that the uptake of sustainable drainage systems (SuDS) in new development was low.
Wednesday 29th October 2014
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Life Actuarial Contract - Capital Project (outside IR35)

England
Negotiable
Reference
149010

Pricing Consultant (Non-Life)

London / Leeds
Up to £70,000 + Benefits
Reference
148996

Senior Actuary

London (Central)
Negotiable
Reference
148991
See all jobs »
 
 
 
 

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

© 2023 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