Changes to USS pension contributions
Following a Higher Education Sector wide consultation, there are some changes planned for the Universities Superannuation Scheme (USS) pension.
If you are a member of the USS pension, your contributions will rise from 8% to 8.8% on 1 April 2019 of your salary. This equates to an estimated monthly change (though personal circumstances may differ) of:
- £14 for those on an annual salary of £30,000
- £18 for those on an annual salary of £40,000
- £23 for those on an annual salary of £50,000
You do not need to do anything - your April pay will be automatically adjusted to reflect this change.
At the same time, LBS will increase the amount it contributes to your pension from 18% to 19.5% of your salary.
What other changes are proposed?
- Further increases to member (employee) and employer contributions are propsoed for 1 October 2019 and 1 April 2020 (see chart below).
- The USS trustee is currently carrying out a new valuation - as at 31 March 2018 - this may lead to the proposed changes after April 2019 being altered or reduced.
Is the match changing?
If you currently take part in the employer match, you will need to review and take action as the 1% employer match into the USS Investment Builder is to be discontinued from 1 April 2019. Find out what you need to do if you currently participate.
Why are contribution rates changing?
USS is funded by contributions from both members and employers. At least every three years a valuation is undertaken to ensure that the scheme has sufficient monies to pay its promised benefits.
The 2017 valuation identified an estimated deficit of £7.5bn and so, following a consultation carried out in autumn 2018 which the School took part in via the SMT, Faculty Board and the Staff Committee, the trustee has introduced these contribution increases. They are being split 35:65 between members and employers respectively.
Owing to the complexity of this 2017 valuation, and with guidance from a newly created Joint Expert Panel, an exceptional 2018 valuation is currently under way. The outcome of this valuation should be available in advance of the proposed increase in October 2019.
Does this affect the benefits I will recieve from my pension?
No. The benefits you recieve from the scheme are protected and remain unchanged. Find out more.
The changes to the USS pension are an important, complex and emotive subject and so we have provided a range of resources should you wish to delve deeper.
- The USS scheme explained
- USS in numbers
- What do you get out of USS?
- Why does USS have to change?
- What are the changes from 1 April 2019?
- Potential impact of contribution increase on take-home pay (see table 2)
- What should you do next?
- Original outline of proposed changes to USS
- The 2017 valuation Q&A
- Summary of the consultation responses
- Plans for 2018 valuation
- 2018 valuation Q&A