Important information for all staff members of Universities Superannuation Scheme (USS)
Friday, 09 July 2010
The Universities Superannuation Scheme (USS) has been under review in response to growing cost pressures and members living, on average, longer. The review board has now reported and the Joint Negotiating Committee of the Universities Superannuation Scheme (USS) confirmed this week that the package of proposals for reform of the scheme proposed by the employers would be recommended to the USS Trustees on 22 July.
This step is part of the formal process which will include a full statutory consultation, starting in late September, with all employees in the scheme once the Trustees have approved these changes. This conclusion was reached when independent chairman, Sir Andrew Cubie, exercised his casting vote in favour of the employers' proposals.
The proposals are:-
1. Normal pension age of 65 will be introduced for new entrants and for the future service of existing members
2. Existing members over the age of 55 will be exempt from the changes to the normal pension age
3. The normal pension age will be linked to increases to the state pension age
4. A flexible retirement scheme will be introduced which will be available to members from age 55
5. The employee contribution rate for members of the final salary section will increase to 7.5%
6. Pension increases (for pensions in payment) will be inflation proofed in line with increases in the [Retail Prices Index (RPI)] subject to a 5% inflationary cap
7. Pensions in deferment will be increased by [RPI] or 2.5%, whichever is the lower
8. A CARE benefits structure will be implemented for new entrants. The benefits will be based upon a 1/80th pension and 3/80th cash lump sum formula
9. The contribution rate for members of the CARE scheme will be 6.5%
10. Cost sharing will be introduced and any increase in the joint contribution rate of 23.50% (22.50% for the CARE section) will be shared 35%/65% by employees and employers respectively
If you would like more information, further details are available at http://www.employerspensionsforum.co.uk/en/pension-schemes/uss-review.cfm