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USS pension changes ‘would divert money from research’

     

Employers raise fears that increased pension costs would “dilute research progress”

Three employers have expressed concern that significant rises in employer contributions to the Universities Superannuation Scheme would have “far-reaching consequences” for the work they are able to do.

In a letter to Research Professional News, the Engineering Development Trust, the Ewing Foundation and the Institute of Food Science and Technology say that higher employer contribution levels would “divert money away from our research, dilute its progress, and therefore, ultimately, adversely impact on our ability to improve lives”.

Members of the University and College Union, which represents staff, are being balloted on strike action over the terms of the USS. On 1 October, members’ contributions to the scheme increased from 8.8 per cent of salary to 9.6 per cent, while employers’ contributions rose from 19.5 per cent of salary to 21.1 per cent. However, the UCU believes that employers should cover the whole contribution increase.

In the letter, the three organisations write that “significant increases in pension costs [for employers] would have far-reaching consequences for the important work that we do”.

“USS, one of the largest private sector pension schemes in the UK, has 340 employers ranging from larger universities through to smaller research-based institutions and charities like ours. All employers have to contribute the same percentage of salary to pay for staff pensions.

“In recent years, the cost of providing defined benefit pensions—a guaranteed amount of pension payments—has risen because people are living longer, and the economic environment has been challenging.”

They add that employer contribution levels are “much higher than for most other private pension schemes”.

“Our hard-working and talented employees deserve a good pension, but it can’t be a limitless contribution rate escalator,” they say. “The UCU is demanding that employers pay a higher rate, which would be unacceptable, because it would take contributions to 22.7 per cent of salary—an extra £123 million in total each year.”

Paul Bridge, the UCU’s head of higher education, told Research Professional News: “It is the employers’ failure to press USS to implement the Joint Expert Panel’s recommendations, as well as their decision not to work with UCU and instead support the imposition of unnecessary extra costs emerging from the latest valuation, that has led us to this point.”

He added: “USS members should not have to pay for their failings. Individual employers who are concerned about the impact of this decision should put pressure on Universities UK to return to negotiations as soon as possible and make an offer to settle the dispute.”