The University is one of a large number of universities across the country who are part of the Universities Superannuation Scheme (USS) pension. Part of the dispute with the
Universities and Colleges Union (UCU) is about proposed changes nationally to the amount that staff who are members of the scheme contribute towards their pensions.
The USS is a private pension scheme which is currently in deficit - this means that there are concerns that it will not be able to fund the expected level of pensions now and into the future unless more money is paid in or the amount of benefit that people get when they retire is reduced. Through the UCU union, staff who are members of USS have already advised that they do not want to reduce the amount of pension benefit they would get when they retire, which means the only other option is to increase the amount that is paid in.
At the request of UCU a number of years ago, any additional money being paid in contributions to the USS pension is split between the member of staff and the employer at a ratio 35:65 respectively, with the employer (university) paying the larger share.
As a result pension contributions will increase from 18% to 21.1% for employing universities and from 8.8% to 9.6% for staff who are scheme members. The University agrees that staff should have a good and sustainable pension and, along with other universities, has already agreed to increase the amount that employers are contributing in order to protect the current level of benefit that staff receive when they retire.
This latest increase in employer contributions means that since 2014 employer contributions to USS have risen from 14% to 21.1%. As a result the University is spending an additional £14million per year on pension contributions for staff, with the latest increase costing an additional £6million this year. This level of employer contribution is very high for a private pension scheme and the additional funding to support pensions also reduces the level of investment the University is able to make in our people and facilities which support students’ and our research and civic activities. If you would like to find out more about the background to the pensions dispute please visit the intranet site https://intranet.birmingham.ac.uk/finance/pensions/USS/2018-USS-valuation.aspx or the USS Employers website https://www.ussemployers.org.uk