USS overhaul could leave staff over £200,000 worse off at retirement
A lecturer starting work today could be £208,000 worse off over the course of their retirement if Universities Superannuation Scheme (USS) proposals take effect.
In a report prepared for University College Union (UCU) by First Actuarial, it was also revealed that lecturers who worked in post-1992 universities, or polytechnics, could miss out on as much as £385,000 if academics were signed up to the rival Teachers' Pension Scheme (TPS), instead of USS.
It further looked at the impact on staff in USS, and found that a lecturer who started in 2007 with 10 years' past service could see their annual pension fall by just over £6,000 a year in retirement, or £131,000 in total.
According to the report, the total loss in retirement for current USS members reduces with the more past service they have, and someone with 20 years' past service could lose £35,000 in total.
UUK wants to abolish the current system where contributions on the first £55,550 of earnings go directly into the DB scheme, while anything above that goes into the defined contribution (DC) plan.
However, it has said it might reopen the scheme to future accrual on the condition the scheme funding level improves.
The revelations about how much staff can expect to lose come as UCU members claimed to have received ballot papers asking them to back a sustained campaign of strikes and other forms of industrial action.
The union has warned of "chaos on campuses" in the new year if the dispute cannot be resolved.
The postal ballot opened on 29 November and will close on Friday 19 January.
UCU general secretary Sally Hunt said: "This analysis reveals just how damaging UUK's hard-line plans for the pension scheme would be on an individual basis for people who have planned and saved for their retirement.
"Already offering worse benefits than other schemes available in the sector, these proposals would devastate USS members' pensions and could create a recruitment and retention crisis as staff jump ship to secure their futures."
She urged all members to take a look at what these proposals would mean for them and then make sure they vote in the ballot on industrial action.
A spokesperson for Universities UK said: "We do not recognise these UCU calculations as accurate or credible. To maintain the current level of USS pension benefits, would require an additional 11% of salary - this is simply unaffordable for many institutions and employees. Our benefit reform proposal would offer a sustainable and affordable solution as well attractive pensions to employees.
"Just a week ago UCU claimed that members would only receive 20% of their current benefits under our proposal, but these figures now suggest this is closer to 70%.
"We are concerned that publishing figures, without setting out the context or assumptions made, such as the rate of investment return, is highly misleading for USS members. We will shortly be publishing clear and credible modelling on what the employers' proposals could mean for members.
"It is important to be clear about the significant differences between USS and TPS. TPS is a statutory, unfunded scheme backed by the UK taxpayer.
"In contrast, USS is a private sector scheme directly backed by higher education institutions. This means USS employers bear the risk if there isn't enough money to deliver the promised benefits. It could mean some employers have to use money earmarked for teaching or research to pay pension benefits and some may even face closure."
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