Proposed changes to USS

Under the cost sharing rules (incorporating the removal of the employer match), members’ normal contributions would rise from the current rate of 8% and employers’ contributions would increase from 18%.

The increase in total contributions would be split 35:65 between members and employers respectively, and the trustee plans to phase in contribution increases from 1 April 2019 to 1 April 2020.

Increased contributions apply to total salary, i.e. salary above and below the salary threshold (currently £57,216.50).

Uss increase in contributions

Under the proposals, members with Enhanced opt-out will not be affected by any proposed increases in contributions. Contributions from members with a Voluntary Salary Cap would increase in line with the proposals up to the level of the cap, with their optional contributions above the cap to retain death and ill-health benefits being made in addition.

Uss member contributions fund
Uss employer contributions

The cost sharing process will run separately to, but in parallel with, the outcome of the JEP's assessment and will be in effect until such time as any subsequent JNC decision on benefits and/or contribution changes is implemented.

As part of the operation of the cost sharing rules, it is proposed that the employer’s match would be discontinued from 1 April 2019.

This would reduce the maximum combined contribution required from members and employers from 37.4% to 36.6% (the reduction is slightly less than 1% because not all USS members currently take the match).

Should it be removed, any members who currently take the match would continue to make their 1% additional contributions to the USS Investment Builder, but employers would no longer match those contributions from 1 April 2019.

Any members that wish to stop making the 1% additional ‘match’ contribution can do so using My USS.

Members that earn above the salary threshold (£57,216.50 for 2018/19) will continue to save in the USS Investment Builder.

Currently, 20% of salary above the threshold is saved in the USS Investment Builder: 8% from members and 12% from employers.

It is proposed that contributions on salary above the salary threshold would rise in line with contribution increases under the cost sharing rules. Under the proposal, 20% would continue to be invested in members’ USS Investment Builder savings.

The excess would go towards supporting the benefits provided by the USS Retirement Income Builder section of the scheme.

Under the proposal, as further contribution increases are phased in, contributions above the salary threshold would also rise. However, the contributions saved to the USS Investment Builder would remain at a combined 20%.

There are no other proposed changes to members’ benefits as part of this consultation, with members’ contributions and employers’ contributions on behalf of members continuing to build up at the same rate of 1/75ths in the USS Retirement Income Builder (up to the salary threshold), and continuing to be invested in the USS Investment Builder (where members earn above the salary threshold or make additional contributions).

  • Active members’ defined benefits will continue to be increased, broadly in line with inflation.
  • Members will continue to have the same death in service and ill health retirement benefits for as long as they are active members of the scheme.
  • Members will continue to be entitled to the same pension payments and lump sum from the USS Retirement Income Builder in retirement.
  • The USS Investment Builder will continue to be available for members who make additional contributions or transfer benefits from another pension arrangement into the scheme.
  • Members can still choose to manage their own USS Investment Builder funds or opt for the trustee to do it on their behalf.

Any pension benefits members have already built up in USS to the date of change are secure and protected by law. USS is governed by a trust deed and rules and if there is any difference between the content of this website and the trust deed and rules, the latter will prevail.