We are writing to alert you to an important issue relating to USS revaluation, and to highlight where information and advice can be found. This is particularly important to understand the implications if you are thinking about leaving USS (e.g. by retiring or moving to a non-USS employer). If you are in this position and have taken advice from a financial advisor, please make sure they are aware of USS ‘Rule 10’ (you can point them to USS’s “Guide for IFAs”).
The ‘Rule 10’ issue relates to losses in a year of ceasing service when the standard measure of inflation used to revalue pensions – UK Consumer Price Index (CPI) – is increasing, which it currently is. It occurs due to the unusual and little-known USS Rule 10, which may have impacted around 90,000 scheme members, with estimated losses of £150m.
It may specifically impact those who:
- Will cease service over the coming year (and potentially beyond),
- Recently left USS (since 1 April 2025),
- Left USS between 1 April 2016 – 30 March 2018,
- Left USS between 1 April 2021 – 30 March 2023.
The impact results in erosion of pension value, which in some cases is significant (in the worst cases this may amount to tens of thousands of pounds over the course of a member’s retirement).
We are alerting members to resources and information available:
- UCU issued communications earlier this month on USS Active and Proportionate Revaluation, explaining the issue, the work UCU is doing, where to get support from USS on understanding the range of factors that impact on benefits and how to access independent financial advice.
- UCU USS negotiator Jackie Grant has summarised the problem: Can USS DB pension benefits decrease by paying more? Surely not, but… astonishingly: yes. Sarah Joss, previous USS negotiator, with Jackie, has written here: The USS Hangover Revaluation, or why Rule 10 will cause some members a long lasting headache.
- This has been followed by a detailed piece by Mike Otsuka, a former UCU USS negotiator, who raised the original complaint which led to USS identifying a Rule Breach: USS members may have claims for the pensions ombudsman.
Please get in touch if you have questions.
Matthew Inglis (LUCU Pensions Rep)