06 April 2022

By email:
Strathclyde University and College Union

Dear Colleagues,

Thank you for your e-mail dated 31st March 2022 with respect to the latest updates from USS regarding the pension scheme. I am writing on behalf of the Executive Team to clarify the University’s understanding of the current position.

Whilst it is encouraging to see an indicative improvement in the funding position, it is important to note that recent information you have referred to comes from a monthly monitoring report and not a full actuarial valuation with the position remaining very volatile month-to-month.

USS have indicated that the impact of the latest reforms has been taken into account in the recent financial update on the funding position of the scheme. The statement has taken account of the deficit recovery payments being made by universities and the additional covenant support to the USS scheme that has been put in place by employers because of the 2020 valuation.

The USS Trustee has indicated that, without the reforms, escalating contributions would be payable by both members and employers. The USS Trustee’s February 2022 monitoring indicated that – if reforms had not been made – a future service rate in the region of 40.7%, plus a deficit of £6.3bn would require to be addressed which would require further deficit contributions of between 4% and 6.2%.

The University’s response has consistently been guided by the following principles:

• We want the best possible pension provision for our staff within an appropriate resource envelope for both employers and individuals;
• We wish to retain a meaningful Defined Benefit element within USS;
• We view pension provision as a key element of our staff benefits, rather than purely a cost, and we are prepared to pay more for that if the benefits to our staff justify the additional cost; and
• This has to be balanced with affordability for individual staff members and the University.

The University has previously outlined its concerns that higher contribution rates would result in increasing numbers of staff opting out of the pension scheme.

I note that similar matters have been also been raised at a national level by UCU and the UUK response is available on their website. It is our continued view that constructive dialogue at national level, with a focus on governance reform and low-cost pension options, is now the best way forward.

I would also like to take this opportunity to advise you that in light of the current economic conditions, the Executive Team has decided to phase the pay deductions for the recent strike action. Deductions for participation in strike action between Monday 21st March and Wednesday 23rd March will be made in April 2022 and deductions for participation on Thursday 24th and Friday 25th March will be made in May 2022.

Best wishes

Gordon Scott
Director of Human Resources