The £18bn Universities Superannuation Scheme has changed its rules to accommodate the large number of workers in irregular employment.
USS – the UK’s fourth biggest pension fund – has introduced a notional full-time salary rather than set up a stakeholder scheme.
Irregular workers are paid on an hourly rate. But a notional equivalent full time salary - which relates the job to a full time post - enables USS to work out the amount of pensions benefit they have earned.
Prior to the changes, USS did not supply pension provision for those outside standard employment contracts.
However, after pressure from member institutions, part-time employment regulations – which came into force in July last year – and the introduction of stakeholder last month, the urgency to provide adequate pension benefits has escalated.
Chief pensions manager Stewart Neil said: “The need for the new rules was instigated initially by the institutions themselves.
“Members were saying to employers that it was unfair that they did not get pension benefits because they were not on regular contracts. Institutions came to us and asked if it was possible to come up with a possible solution.”
Neil said the new rules conform with the existing benefit structure.
He added: “Prior to the changes, everyone [in the pension scheme] had to have a regular contract where an annual salary is stated. Irregular employees do not have a regular contract or a stated annual salary and, therefore, they did not receive any benefits. They have not been eligible for USS, until now.”
USS institutions employ a large number of workers on an irregular basis and Neil estimates that tens of thousands of workers will be affected by the changes to the scheme rules. Approximately 290 academic institutions are represented under the USS with an approximate total of 160,000 members consisting of 85,000 active members, 30,000 pensioners and 40,000 deferred pensioners.
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