USS pension scheme reports improved position
22 May 2023
The funding position of the USS pension scheme has improved slightly since the end of 2022, according to the latest quarterly update.
The monitoring report from the USS Trustee, which runs and manages the USS scheme, indicates the scheme is in a better position compared to the last full valuation in March 2020, providing hope that pension benefits could be increased and employee contributions reduced later this year.
This update is less accurate and separate from the full valuation process of the scheme, which is currently taking place and involves more detailed analysis. This is why the USS Trustee continues to take a cautious approach and will base any decisions on changes to the scheme on the full valuation.
Members will be updated and consulted on this valuation by the Trustee in the coming months. It is likely to involve consultations on any changes and final submission and approval by the Pension Regulator.
Update details
The quarterly update, based on a snapshot on 31 March 2023, shows that the scheme’s previously reported deficit of -£14.1bn has become a potential surplus of +£7.6bn, assuming no change in the current benefits.
Based on these figures, the proportion of USS members’ salaries that would be needed to maintain the current level of benefits is now calculated as 17.5% - employers contributing 12.3% and employee 5.2%.
The update goes on to assess that if benefits were to be increased to the levels before the 2020 valuation, then the rate would need to rise to 21.8% (15.2% and 6.6% respectively).
For reference, the current rate payable is 21.6% for employer and 9.8% for employee, so a total of 31.4%. So, under any scenario there is likely to be a reduction in membership costs for individual colleagues and for employers, which is welcome.
Data breach
The USS has also this week reported an apparent data breach of USS member data held on Capita servers. This is being investigated by Capita.
The USS Trustee has provided an update on the breach. It is contacting all affected members and will provide support.
Colleagues will get further updates direct from the USS Trustee as soon as they are available.
See our information page for more details.