Russell Group response to USS Trustee report on pensions

03 March 2021

In response to the latest valuation report published by the USS Trustee today (3rd March 2021), Dr Tim Bradshaw, Chief Executive of the Russell Group, said: 

“The global reputation of the UK’s universities is down to the talent and dedication of the people who work in them. Universities recognise this and that is why they invest more in people than anything else. As part of that investment we want to provide a pension that is attractive and fair to all staff, but it also has to be affordable for everyone involved.

“However, the proposals put forward by the USS Trustee today are unaffordable for staff and employers and don’t reflect the significant backing that the sector provides for the scheme. 

“We recognise the scheme is currently in deficit and changes will be needed to address this, but at the same time the scheme must be sustainable for the future and continue to provide security for our staff. In particular, we are concerned that around 1 in 6 have already opted out because it is too expensive or does not meet their needs.

“We will need to consider carefully all of the information provided by the Trustee and regulator to ensure changes implied by today’s report are not being driven by an unnecessarily cautious approach.”

Further Information

  • Universities invest more in staff and their future than anything else, accounting for 59% of all expenditure in 2018/19 compared to less than 50% in the private sector. Spend on staff in the higher education sector is 44% higher than in 2015-2016.
  • There has been a 50% increase in the level of employer salary contributions to USS over the last decade. (14% in 2009 to 21.1% from 2019).
  • The average total (i.e. employer and employee) salary contributions in other private sector pension schemes is 12%-14%. With USS, it is 30.7%.
  • Employers are spending more on staff costs every year than they have ever done – £26 billion – which is more than they spend on anything else. 

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