This letter is directly relevant to those EIS-ULA members who are members of the USS, or who chose to move to the USS if they accept a promoted post within their pre-1992 HEI at some date in the future.
A copy of an update to EIS-ULA members may be downloaded on the right hand side.
The Employers (through Universities UK) are currently developing proposals to take to the USS Board. These proposals will reduce benefits for all current USS members who are paying in but yet to start receiving their pensions. If the USS Board decides to implement the Employers’ proposals then the USS will be carrying out a full consultation with USS members.
There is a reported deficit within the USS, and the Employers are proposing to rectify this by increasing their contributions to the Scheme by 2%.
If implemented, the proposals would mean that all USS members (from April 2016) would be contributing to a hybrid pension scheme made of two parts:
• a defined benefit pension on salaries up to £50k
• a defined contribution pension on any salary in excess of £50k
Defined-benefit schemes usually produce a guaranteed pension income on retirement, based on pensionable service, final salary or career average salary, annual accrual rate, and inflation uplift for use in calculating average career average salaries in such schemes.
Defined contribution schemes do not produce a guaranteed pension income on retirement, the pension is usually paid as an annuity and these are dependent on the investment of contributions and stock market performance.
EIS members should also note that the planned career average STSS pension has different terms (i.e. pensions) than the proposed USS career average pension. The EIS believes that the USS terms are inferior as it believes that the USS accruals rates and inflation revalued earnings are lower – thus decreasing pensions. Also, unlike the USS, career average STSS pensions will not be capped to £50kpa.
The EIS will be submitting evidence to any USS Consultation.