Pension tensions (1 of 3)

April 7, 2011

In "Candid Cantor" (Letters, 31 March), Daniel Vulliamy misreads Brian Cantor's letter of 17 March on the Universities Superannuation Scheme and quotes him out of context. As Cantor points out, the changes to the USS are moderate - the minimum necessary to address the risks facing the scheme - and include the retention of final-salary provision for existing members.

Vulliamy then contrasts the USS reforms with the Hutton Commission's proposals to close final-salary provision for all public sector employees (including those in post-1992 institutions).

Despite this changing climate, higher education employers are committed to implementing the approved USS changes as they stand - including the retention of final-salary deals for existing staff. We urge the University and College Union members of the USS joint negotiating committee to end their boycott of the agreed process.

The outcome of the pending triennial USS valuation remains uncertain, but the possibility of a deficit cannot be ruled out and the reforms should provide the necessary headroom to address any shortfall.

For existing USS members, the price of retaining final-salary provision is a small rise in member contributions. In the sector's challenging financial environment, it seems perfectly reasonable for increases in pension costs to be shared between members and institutions - unlike in 2009, when institutions' contributions rose to 16 per cent, amounting to more than double that of employees.

Hopefully readers and members will take the time to gather the facts to understand both the case and the context for these moderate changes.

Tony Bruce, Employers Pensions Forum consultant

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