USS bonuses went up £4 million as final salary pension scheme axed

Bumper year for fund managers at the Universities Superannuation Scheme

September 3, 2015
Colleagues around a nest of gold eggs
Source: Getty
Going for gold: USS staff earning in excess of £300,000 more than trebled

Investment staff at the Universities Superannuation Scheme pocketed an extra £4 million in bonuses as plans to axe final salary pension schemes were finalised.

While many university staff at pre-92 universities were locked in an industrial dispute over radical changes to the sector’s largest pension scheme last year, 2014-15 was far kinder to executives and investment staff at the USS, its latest annual accounts show.

The amount paid to staff under incentive plans rose by £4 million in the year ended 31 March 2015 in light of strong investment returns, with the company’s top earner taking home between £900,000 and £950,000, the USS said.

A number of high-level executive appointments and other related increases in headcount also added an extra £4.6 million to the company’s personnel costs, which rose by 26 per cent last year to £44.1 million, it added.

It meant that the number of USS staff earning in excess of £300,000 more than trebled to 17 in 2014-15, up from five in 2013-14.

One of these employees was Bill Galvin, the scheme’s group chief executive, whose salary and benefits rose to £432,000, up from £309,000 the previous year.

The improved remuneration reflected the scheme’s “strong” investment performance, which had exceeded benchmarks and contributed an additional £500 million to the value of the fund last year, a USS spokeswoman said.

It was important for the fund to “attract and retain appropriate talent to continue to manage the scheme’s substantial assets”, which total about £48 billion, she added.

The USS still remained cost-effective, according to the latest available figures for 2013, which showed that its investment costs were about £20 million less than the industry standard for a scheme of the size and asset mix of USS, she added.

Mr Galvin, a former head of The Pensions Regulator who joined the USS in August 2013, added that recent high-level hires were a “substantial investment in our in-house capabilities” that “put the executive on a sound footing as we prepare to deliver the substantial changes put forward by our stakeholders”.

However, as reported in Times Higher Education last week, despite the excellent returns the scheme’s deficit rose substantially last year to £8.3 billion in March 2015 as low gilt yields and predictions of low long-term growth pushed up liabilities.

Under a plan accepted by the University and College Union earlier this year, the USS’ previous link to final salary will end next year, with institutions’ contributions rising to 18 per cent of salary and members’ contributions to 8 per cent.

The plan was agreed last month after consultation with USS members and institutions, although many academics have continued to challenge the rationale for ending final salary pensions, once regarded as a major perk of academia.

jack.grove@tesglobal.com

You've reached your article limit

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 6 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

POSTSCRIPT:

Print headline: Bonuses grow as pensions revised

Have your say

Log in or register to post comments

Featured Jobs

Head of Visual Arts UNIVERSITY OF HERTFORDSHIRE
Research Officer - Big Data for Better Outcomes LONDON SCHOOL OF ECONOMICS & POLITICAL SCIENCE LSE
Lecturer in Oral Microbiology UNIVERSITY OF BRISTOL

Most Commented

question marks PhD study

Selecting the right doctorate is crucial for success. Robert MacIntosh and Kevin O'Gorman share top 10 tips on how to pick a PhD

India, UK, flag

Sir Keith Burnett reflects on what he learned about international students while in India with the UK prime minister

Pencil lying on open diary

Requesting a log of daily activity means that trust between the institution and the scholar has broken down, says Toby Miller

Application for graduate job
Universities producing the most employable graduates have been ranked by companies around the world in the Global University Employability Ranking 2016
Construction workers erecting barriers

Directly linking non-EU recruitment to award levels in teaching assessment has also been under consideration, sources suggest