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USS on course for restored benefits and lower contributions

19 July 2023

Today, a consultation launched by the USS Trustee shows that the scheme is on track for full restoration of pension benefits by April 2024, which follows cuts that were imposed on staff in April 2022.

Figures included in the consultation demonstrate that not only can pensions cuts - which saw members lose on average 35% from their guaranteed retirement income - be restored, but that the contributions members are required to pay into the scheme can be reduced.

The turnaround is a vindication of UCU's position that the April 2022 cuts were flawed, unnecessary, deeply irresponsible, and demonstrates that UCU members were right to fight and take strike action to protect and win back their pensions.

Today's valuation confirmed that scheme's surplus is now valued at £7.4 billion, and that the current high interest rates mean the cost of restoring benefits in full requires an overall contribution rate of approximately 20.6%. Importantly USS also addresses future valuation cycles showing stability can be achieved with joint contributions of 26%.

UCU pressure has also meant that USS has recognised the potential to uplift benefits from the surplus in recognition of the last two lost years of benefits.

This is a positive turn that exceeds even the most recent predictions in May, and could see member contributions lowered to 8% or less, even as little as 6.1%, once agreements between UUK and UCU about ensuring stability for future valuations have been concluded.

UCU general secretary Jo Grady has written to the chair of the USS trustee board [587kb] to establish if contributions can be done earlier than April 2024.

Universities UK have pledged to work with the UCU to ensure that restoration of the scheme and other positive changes are introduced such as developing an equitable method to restore the lost value of member pensions, between April 2022 and restoration, is agreed and will now consult employers following the publication of today's USS Trustee document.

UCU general secretary Jo Grady said: 

'This is yet another step towards the restoration of our members pensions. I have lost count of the times we were told it would never happen, we were often mocked by pensions "experts" who maintained that our campaign and actions were pointless. This is a lesson, not only to UCU members, but workers in general - if you are prepared to fight for something then there is always a chance.

'We will now use the coming months to ensure the employers fulfil their obligations and we see this through to full restoration. At that moment, our members will go down in history.

'This is also good news for the university sector as a whole. If the employer, UCEA can now table a proper pay and conditions offer then we can bring much needed stability to our sector for the first time in nearly a decade. This is what's needed. It is what students deserve and it is what staff deserve.'

Last updated: 19 July 2023