Membership satisfaction with UK higher education’s largest pension fund has declined amid the ongoing dispute over the scheme’s valuation.
The Universities Superannuation Scheme, which has 439,572 members, has released its annual report for the year ended 31 March.
The state of the relationship with members “declined” in 2018, with 31 per cent of members reporting a positive relationship with the scheme, down from 38 per cent in 2017. Meanwhile, 23 per cent held a negative view, up from 16 per cent in 2017.
The impact of the “scheme valuation and views of our handling of that process are strong drivers of the outcome”, the report said.
Members of the University and College Union held strike action over the pension dispute last year, and they could do so again if the current impasse over future contributions is not broken.
Representatives of the UCU, which represents members, and Universities UK, which represents employers, on the scheme’s joint negotiating committee are discussing three options put forward by the USS trustee for completing the 2018 valuation.
Until the 2018 valuation is completed, contribution increases required under the 2017 valuation will apply (10.4 per cent for members and 22.5 per cent for employees from October 2019).
“It is clear that some members feel that we have not handled or communicated the complex issues we are grappling with as well as we might,” Bill Galvin, USS chief executive, says in the report.
The challenges of the 2017 and 2018 valuations “have towered over events in the past year”, adds Mr Galvin, and they “continue to be our most pressing and important priority”.
Jo Grady, UCU general secretary-elect, said: “It has been clear for some time that USS has lost members’ trust. That it has taken the annual report to alert those leading the scheme to this fact suggests they are worryingly out of touch.
“We want employers to use their considerable influence to hold USS’ managers to account.”
She added: “We are heading towards another round of industrial action because universities are refusing to cover the cost of the extra contributions that USS has demanded.”
A UUK spokesman said the “UCU’s ‘no deficit’ position is simply not viable in the regulatory environment within which USS operates, and is not a realistic outcome for the 2018 valuation”.
Employers are “committing to pay an extra £250 million per year” and “bearing two-thirds of the increases”, so it is only “fair and reasonable that members also pay their share”, he added.
The annual report also shows that the value of assets in the defined-benefit element of the scheme grew by £3.8 billion to £67.4 billion over the financial year to the end of March, while the defined-contribution element of the scheme has assets totalling £800 million.
The total deficit is £5.7 billion, based on monitoring of the 2017 valuation.
Sir David Eastwood, chair of the USS trustee board, said: “We acknowledge the challenges in levying higher contributions and have worked hard to find ways in which these can be escalated gradually, or made contingent on events.
“There are no easy answers to the challenges that low interest rates and the uncertainty of Brexit, university funding, and the global economy pose – but we remain resolutely focused on achieving excellent outcomes for members and institutions and on protecting all that is good about USS.”
After 15 years on the board, and five and a half years as chair, Sir David is coming to the conclusion of his term of office, which will formally end in August 2020.
The trustee company will shortly be advertising for a new independent director, who will be in a position to take over from Sir David when he steps down.