JEP report response and latest USS developments

I wanted to update you on latest developments regarding the Universities Superannuation Scheme (USS).

1. The Joint Expert Panel (JEP) made its first report in September. It recommended a number of changes to the 2017 USS valuation which, if implemented, would protect members' pension benefits at a cost significantly lower than that originally proposed by USS. JEP also proposed a 'phase 2' report which would seek to identify principles to underpin future valuations. More on JEP's recommendations here.

2. The Superannuation Working Group (SWG) which is the body that negotiates with Universities UK (UUK) welcomed the JEP report as 'a significant and impressive piece of work" and stated that it's recommendations should "form the basis for negotiations'.

3. UUK is currently consulting with HE institutions about their views on the JEP and in particular on their appetite to pay more in contributions and take on more risk arising from the recommendations.

4. USS has now indicated, subject to being satisfied with the position reached by the employers, that it would be prepared to hold a fresh valuation which would enable the scheme to take account of JEP and its aftermath.

5. The cost sharing consultation launched by USS prior to the publication of the JEP concludes on Friday, 2nd November. Members are encouraged to respond to the consultation to state that they value their current pension benefits; fear that significant increases in contributions will cause people to leave the scheme; and that they wish USS to take full account of the JEP and engage fully with the scheme's stakeholders to protect benefits.

6. JEP was strongly critical of Test 1 in its first report and a lively debate has continued within the union and beyond including about the position the fund would be in if none of the derisking proposed by USS took place. UCU is discussing this and other issues with our actuarial advisors as well as with the employers' representatives. Finding alternative methodologies which enjoy the support of scheme members and employers will be a key task of phase 2 of JEP.

7. The next step for UCU is that the Higher Education Commmittee (HEC) will this week consider the latest position including the reports of SWG and the National Disputes Committee (NDC) which is the body that advises the SWG. A delegate conference on USS will then take place on 7 November.

From the above I hope you can clearly see the path from this time last year when we faced a proposal to eliminate the guaranteed pension at a lifetime cost to the average member of £200,000.

UCU has for many years argued for an independent analysis of USS's valuation methodology of the type conducted by the JEP. We won that concession on the back of your industrial action. The JEP panel's report has already proved to be a real catalyst for further progress. 

We all have more work to do to achieve a positive outcome. However it is important not to underestimate members' achievement in turning back the tide which has swept away the guaranteed pensions of so many other workers.

I will update further after the USS conference.

Matt Waddup
UCU national head of policy and campaigns