Newsnight on Thursday 24th October had an item that presents the USS pension scheme as having a ‘black hole’ that will need to be filled by increased student fees. This is mis-leading. Read this blog post for a furhter view point on this as well as the press releases from UCU.
You can email Newsnight to complain about this at email@example.com
Those of you on Twitter can tweet @bbcnewsnight and use the hashtag #newsnight. You might also like to contact Newsnight editor Ian Katz –
@iankatz1000 – who has been quite ‘prominent’ on Twitter recently and rather sensationalised last night’s story:
@iankatz1000 – Have we got #newsnight for you…Reasons to stay up No 1: We reveal huge black hole in universities pension fund. Will students pick up tab?
The USS pension fund provides a vital benefit and is highly valued by university staff. The University and College Union (UCU) is strongly committed to ensuring the financial stability of the fund and has worked with university employers in recent years to deliver negotiated changes to help secure the scheme.
Next year’s triennial valuation will be the next stage in this ongoing process and provide a more accurate picture of the scheme’s health. The deficit does fluctuate enormously and that is why March’s valuation will provide a far more accurate picture. For example the scheme’s deficit fell by almost £4bn between March and June this year with the scheme going from 77% funded up to 83% funded. USS is not alone in having to deal with funding issues; similar issues are facing other defined benefit schemes throughout the UK.
A joint funding and benefits group of employer representatives and UCU was established in 2012. The group’s remit includes the need to take account of the funding position of USS and its objective is to secure an attractive, affordable and sustainable scheme for members and employers in the long term. Through this group the process is already under way for discussions between the employers and UCU and they are expected to run up to and beyond the March 2014 triennial valuation.
USS has been entirely transparent about the deficit figures and provides comprehensive estimates to institutions on an annual basis. USS has made changes to both benefits and contribution levels in recent years to deal with historic deficits and will continue to work with employers and members’ representatives to agree a recovery plan which is commensurate with the long-term nature of the scheme. The employers have made it clear there is no suggestion that tuition fees will be increased to provide additional funding for the scheme.
Employers have already taken significant steps to address the fund deficit and will continue to work on long-term solutions to ensure that USS remains sustainable and affordable. The range of challenges facing the fund are not exclusive to USS and impact on all pension schemes. There is no question that tuition fees will be increased to plug the USS funding shortfall.