Universities Superannuation Scheme (USS) employers are calling for the 2023 valuation of the scheme to be finalised quickly in order for employers and members to get the benefit of lower pension costs as soon as possible.
The USS trustee has priced the return to April 2022 benefits at this valuation at a total contribution rate from employers and members of 20.6% of salary - significantly lower than the current contribution level of 31.4% and the circa 43% which was the cost of April 2022 benefits at the 2020 valuation.
In a letter to USS, employers have signalled their support for the USS trustee's proposed outcome, and confirmed their support for the agreement reached in May with the University and College Union (UCU), which represents scheme members, to lower contributions, improve pension benefits to the pre-April 2022 level, and explore a series of stability measures for the scheme.
Acknowldging the cost of living challenges faced by members, and the significant financial pressures faced by higher education institutions, employers responding to the recent technical provisions consultation stressed the importance of reducing contributions to the level required as soon as possible.
Employers have also reaffirmed their commitment to continuing to provide the significant covenant measures, introduced at the last valuation to lower the scheme costs, which The Pensions Regulator has rated as strong support.
Universities UK chief executive Vivienne Stern said: "We continue to work closely with the union and USS to fast track lower contributions and improve benefits. We hope these changes can be implemented as quickly as possible to help both scheme members and employers facing serious financial pressures.
"The significantly improved economic conditions for Defined Benefit pension schemes has led to this dramatic upturn in the scheme's financial fortunes paving the way for these positive changes. We are also looking to the future by fully exploring, with USS and UCU, a range of options for creating greater scheme stability including alternative scheme structures and USS governance reform."