Letter: Reason to be prudent 2

January 11, 2002

The Association of University Teachers is still consulting on the merits of accrual proposals for the Universities Superannuation Scheme. It is unlikely, however, to accept the implication of H. C. S Ferguson's latest letter that pension improvement should proceed at the pace of the slowest scheme. The surest way to increase the pensions of those in final salary schemes is to increase their final salaries. It does not follow that one should not seek other improvements.

Moreover, Ferguson misunderstands the public-sector transfer arrangements. Year-for-year transfers of service between USS and statutory schemes have never been automatic. A transfer value must be calculated in every case. If it generally results in year-for-year transfer, that is not only because both schemes have the same accrual rate, but also because both for this purpose assume retirement at age 60. When the USS used to assume a later age, years of USS service transferred were not credited in full by statutory teachers' schemes.

If the USS accrual rate were to improve, the converse would be true until the statutory schemes' benefits caught up again. However, since the AUT and the other unions involved are seeking a 1/60th accrual rate in the Teachers' Pension Scheme, it may be the USS that will need to catch up.

Bill Trythall
Director of USS Association of University Teachers.

Register to continue

Why register?

  • Registration is free and only takes a moment
  • Once registered, you can read 3 articles a month
  • Sign up for our newsletter
Please Login or Register to read this article.


Featured jobs