Benefits and contributions that USS will impose in 2019–20 are superior to the UCU proposal UUK rejected on 23 January!
It is worth drawing attention to the fact that the package of benefits and contributions that USS will be imposing on scheme members in 2019–20 under Rule 76.4 is highly favourable to the union’s position. Recall that this is the UCU proposal that UUK and the JNC chair rejected on 23 January:
— Reduction to 1/80 of the CRB 1/75 accrual up to the £57k salary threshold
— No change to DC contributions, including 12% employer contributions above the salary threshold and 1% DC match
— Increase in member contribution from 8% to 10.9% from April 2019, at which level they would remain for the next three years
— Increase in employer contribution from 18% to 23.5% from April 2019, at which level they would remain for the next three years
The above contribution increases were contingent on USS’s refusal to revise the valuation they approved in November 2017. UCU’s proposal was accompanied by a challenge to the November valuation and a call to revert to the September valuation, which would have resulted in more modest contribution increases. UCU did accept, however, that, if their proposal was accepted, contributions would rise by the above amounts in the likely event that USS refused to revert to the September valuation.
Since JNC did not approve any reduction in the 12% DC employer contribution above the threshold (see here for my case against any such reduction), this is what USS will impose on us for 2019–20 under Rule 76.4:
— No reduction to CRB 1/75 accrual up to the £57k salary threshold.
— No change to DC 12% employer contribution above the salary threshold, but elimination of the 1% DC match
— Increase in member contribution from 8% to 8.8% from April 2019 and to 10.4% from October 2019
— Increase in employer contribution from 18% to 19.5% from April 2019 and to 22.5% from October 2019
The above combination of benefits and contributions is clearly superior to the combination that UCU was willing to accept in 23 January but which UUK and the JNC chair rejected.
Under Rule 76.4, unless JNC cuts benefits or USS revises its valuation, contributions for the same package of benefits will go up to 11.7% for members and 24.9% for employers from April 2020. Given how high contributions will become at that point, it is unclear whether the combination of benefits and contributions would remain superior to the UCU proposal that was rejected on 23 January. It remains the case, however, that what is in store for us for 2019–20 is superior to the UCU proposal.