Most UCU members who are University or College employees will be members of the USS pension scheme, the Universities’ Superannuation Scheme. This is a national scheme to which all UK universities belong, and the UCU is the sole body recognised to represent employees’ interests to the scheme management. The UCU has seats on the USS board.

2018 USS Dispute

See the 2018 industrial action site for details of the 2018 USS Strike

Due to the dramatic changes outlined below, the UCU  successfully balloted for strike action to defend employees pensions, leading to the largest strike action in the sector in early 2018.

In recent years there have been dramatic changes to this scheme. Before 2011 members contributed 6.35% of their salaries, and received a benefit based on 1/80ths of final salary for each year worked (an accrual rate of 1/80th).

In 2011 contribution rates for existing members rose to 7.5%, whilst new members paid 6.5% for a benefit based on 1/80ths of career averaged salary.

In 2016 the final salary section closed, and the contribution rate rose to 8% for all, for a career-averaged salary benefit with an accrual rate of 1/75th. Furthermore, a salary cap of £55,000 was introduced. In respect of earnings above this threshold, money was put into an investment fund whose future performance had no guarantees. The member’s contribution rate remained 8%, and the employer’s contribution rate into this fund was 12%.

Proposed change (January 2018)

The proposals for April 2019 are more dramatic. No more defined benefits at all, but one’s pension will be based on whatever the market value is of one’s personal investment fund at retirement. This is broadly equivalent to reducing the £55k cap above to zero. The proposal seems to be that the employees will be able to contribute either 4% or 8% of salary, and the employers will contribute 13.5% of salary (and pay the funds’ management costs).

These changes are very attractive to the employers. As there is no guarantee of the future worth of the fund, it can never be in deficit, and there are no future liabilities to worry about. From the point of view of the employees, it represents a complete transferral of risk from the employers to the employees.

We believe that employees, and particularly pensioners, should not be expected to take on this degree of risk, and leave the employers with none. A minimum guarantee for one’s retirement income is not at all unreasonable.

The UCU was willing to negotiate on this basis, and to explore the possibilities of raising the employees’ contribution rate, lowering the salary cap, or reducing the accrual rate. The employers have refused to move from their position that the guaranteed defined benefit scheme must be replaced with an unguaranteed defined contribution scheme for all future contributions.

In seeking to make this dramatic and detrimental change, the employers seem to have the support of the Government Pensions Regulator, which is concerned about a large potential deficit in the scheme. Whilst there is a potential deficit, the agreed figure for this on the basis of a 50:50 chance that the figure is too high (or too low) is that there is a surplus of over £8bn. Additionally a recent independent review found that the employers were able to support the current scheme for at least the next thirty years. Thus the evidence that a drastic change is urgently required is lacking.

study by First Actuarial, an independent actuarial firm commissioned by the UCU, suggests that not only is one’s final pension under the proposed scheme highly uncertain, but that on average it is expected to be significantly lower when compared to the existing scheme, with lifetime losses of over £100,000 in many cases. Less benefit, and much more risk.

One of our members has constructed an on-line calculator to help you estimate your losses under the proposed reforms.

These changes were formally withdrawn in April as a result of fourteen days of strike action by the UCU in Lent Term, and the threat of further action.

Proposed change, ACAS (March 2018)

After talks at ACAS, a new set of proposals was produced. These proved to be no more acceptable than the January offer.

Further information

The UCU is not permitted to give financial advice to its members or to anyone else, and nothing on this website should be interpreted as being financial advice. We can repeat facts, and thus have the following information:

Useful external links

Cambridge UCU Action

The USS, and its USS is changing site and members’ login.

The UCU’s pension site.

The Cambridge University’s pension site, and its November 2017 statement on the USS valuation, which includes a link to its response to the UUK employer survey (see particularly the answer to 7a).

The UK Government’s State Pension site, and its State Pension forecaster.

The excellent personal pensions web site of Prof Susan Cooper, an Oxford Physicist.

The UCU will continue to campaign for improved pensions for our members.