All-staff briefing: Update on USS pension reform

Vice Chancellor Robert Van de Noort was joined by HR Director John Brady and Chief Financial Officer Samantha Foley for an all-staff talk about the proposed changes to the USS pension and the related UCU ballot. 

Robert introduced the session by saying that the deficit in the valuation of the USS means “there will be no winners here and we have to make a difficult decision. Either we increase the contributions substantially, or we reduce benefits. There is no other choice available.”  

He said pensions are important to all of us and that it was in our collective interest to have a scheme that was valuable, affordable to all its eligible members and sustainable in the very long term – supporting younger and yet-to-join members. 

Robert said that the USS Trustee has a legal obligation to protect accrued benefits of the scheme’s members, and Universities UK (UUK), of which our University is a member, and the UCU, were responsible for agreeing the measures to reduce the shortfall through the Joint Negotiating Committee (JNC).  

Robert said the proposal put forward by the UUK was the only formal and fully costed proposal to go to the JNC as the UCU decided not to submit a formal proposal. 

He said that the University leadership had worked constructively with UCU on a range of issues and wanted to do the same on pensions.  However, it was important to the USS pension scheme members to know what the UCU was proposing. 

Chief Financial Officer Samantha Foley spoke about the impact of the proposed changes on the University. She explained that this included “covenant support”, which would allow the USS Trustee more rights to monitor the financial health of member institutions. She also explained  that each additional 1% employer contribution equates to a £1million increase in our staff costs, whilst our main income source, student fees, remains static and is reducing in real terms due to inflation. If no reforms are agreed, then USS is entitled to  increase contributions to a combined rate of 57% by October 2025. Samantha emphasised that USS Trustee is working to guarantee that members receive their pension once retired and ensuring the long-term viability of the scheme. 

John Brady laid out the potential impact on individual members of the proposed changes agreed by the JNC: 

John emphasised that without any changes contributions would rise substantially, and was particularly concerned that this would price many members out of the scheme. He also highlighted proposed work to reform the USS to address structural issues and avoid such drastic contribution rate increases in future. 

You can view the presentation on this link, and a full recording of the session is available below. 

Further information 

 All colleagues will be sent an Outlook Calendar invite ahead of the session. If you have any queries, please contact communications@reading.ac.uk. 

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