Loughborough UCU

Tag: USS

  • Upcoming Change to USS Commutation Factors

    The Universities Superannuation Scheme (USS) has confirmed that its commutation factors will be updated from 1 October 2026. These factors are reviewed regularly and are an important part of how retirement benefits are calculated.

    This change may affect members who are considering exchanging pension income for a lump sum, or vice versa, at retirement.

    What are commutation factors?

    Commutation factors are used by USS to determine the value when members choose to exchange:

    1. Part of their pension for a larger lump sum, or
    2. Part (or all) of their lump sum for a higher annual pension

    These factors vary depending on your age and reflect the relative value of the benefits being exchanged.

    You can read more about how these factors work on the USS website: https://www.uss.co.uk/for-members/calculate-your-benefits/factors-used-by-uss

    Exchanging pension for a larger lump sum

    If you choose to give up part of your Retirement Income Builder pension to receive a larger lump sum:

    1. USS multiplies the pension you give up by a commutation factor
    2. The factor depends on your age and the value of the pension being exchanged

    From 1 October 2026, updated commutation factors will apply. Under the new factors, members may receive slightly less lump sum for the same amount of pension exchanged compared to the current rates.

    Exchanging lump sum for additional pension

    If you instead choose to exchange some or all of your lump sum for a higher annual pension:

    1. USS applies a reverse commutation factor
    2. The lump sum is divided by this factor to calculate the additional pension
    3. The factor depends on your age and the value of the pension being provided

    Following the change on 1 October 2026, members may receive slightly more pension for a given lump sum than under the current arrangements.

    What this means for you

    These changes highlight the importance of considering the timing of your retirement decisions. Depending on your plans, the updated factors could affect the value of the benefits you receive when exchanging between pension and lump sum.

    Members are encouraged to review their options carefully and consider how these changes may impact their retirement choices.

    Further information and guidance

    For more detail on USS commutation factors, visit: https://www.uss.co.uk/for-members/calculate-your-benefits/factors-used-by-uss

    Please note that this article is provided for information only and does not constitute financial advice. If you are considering accessing your pension benefits, you should seek independent financial advice.

    UCU members who wish to do so can access the services of Quilter Financial Advisers through the UCU partnership: https://www.ucu.org.uk/quilterfinancialadvice

  • Huge Win on USS Pension Valuations

    UCU have successfully negotiated a change to the methodology to be used for future USS Pension Scheme valuations which will benefit all members.

    For several decades UCU has argued that the valuation method used to assess whether the USS pension scheme has enough money to meet its obligations is faulty. Traditionally, USS has relied on a so-called “gilts plus” method, where the valuation has focused on government borrowing costs (the “gilts”) plus an assumed degree of over-performance (the “plus”). This meant that after the 2008 financial crisis, when government borrowing costs reached record lows, USS appeared to have enormous deficits. This, in turn, led our employers to propose cutting pension benefits and, in 2018, to suggest that our defined benefit pension scheme should be closed entirely. Those who follow these matters closely will recall that the Financial Times described the gilts plus valuation method as “insanely pessimistic”.

    UCU’s position has always been that the long-term performance of USS’s investments — which include long-term investments in infrastructure (USS owns a share of Heathrow Airport, for example) — is unlikely to be highly correlated with short-term government borrowing costs. Since 2010 the union has consistently argued, with the support of its actuarial advisors, that the valuation method should instead be based on a “best estimate minus” approach, by focusing on the scheme’s expected investment returns (the “best estimate”), with a degree of prudence built in (the “minus”).

    It has now been agreed by the USS Trustee that a version of this “best estimate minus” valuation method will be implemented for future valuations. If this method had been in place during the 2010s it is possible that no periods of industrial action would have been necessary. For instance, the 2017 valuation, which led to the long-running 2018 strikes, in fact showed a best estimate surplus of £8.3bn.  The change therefore also significantly reduces the likelihood of future disputes with all of the financial and emotional toll they bring.

    This change is a major achievement by UCU’s negotiating team and national officials, as well as all members who had voted for and taken the strike action which has unfortunately been necessary to focus the minds of employers and keep this on the agenda. Everyone who works in the pre-1992 university sector will benefit.

    Further details: https://www.ucu.org.uk/article/14381/USS-valuation-methodology-changes-agreed—with-more-to-do

  • USS Pensions Review Webinar

    USS Pensions Review Webinar

    Financial Planning and Saving for Retirement

    USS Pensions Review Webinar – Wednesday 11th March, 3-4pm.

    Are you making the most of your money and your USS pension? UCU, in partnership with Quilter Financial Advisers (QFA), is offering a free financial planning webinar designed specifically for USS members who want to build confidence about their financial future.

    In this one-hour session, an expert financial adviser will explain the key principles of managing your money and planning ahead, including how to:

    • Build a tax-efficient nest egg for yourself, your children, or grandchildren
    • Boost your pension provision for a more comfortable retirement
    • Protect your family’s income in case the unexpected happens
    • Understand the fundamentals of investing

    Quilter Financial Advisers is a leading financial advice business with a strong focus on financial education, helping people create a secure foundation for the future.

    Register now to attend the webinar.

    If you can’t make this session, you can still get support; email QFA with your contact details to arrange a free initial appointment with a financial adviser.

  • Financial Planning and Saving for Retirement

    USS Pensions Review Webinar – Wednesday 11th March, 3-4pm.

    Are you making the most of your money and your USS pension? UCU, in partnership with Quilter Financial Advisers (QFA), is offering a free financial planning webinar designed specifically for USS members who want to build confidence about their financial future.

    In this one-hour session, an expert financial adviser will explain the key principles of managing your money and planning ahead, including how to:

    • Build a tax-efficient nest egg for yourself, your children, or grandchildren
    • Boost your pension provision for a more comfortable retirement
    • Protect your family’s income in case the unexpected happens
    • Understand the fundamentals of investing

    Quilter Financial Advisers is a leading financial advice business with a strong focus on financial education, helping people create a secure foundation for the future.

    Register now to attend the webinar.

    If you can’t make this session, you can still get support; email QFA with your contact details to arrange a free initial appointment with a financial adviser.

  • Potential loss of retirement income from USS rule change

    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:

    1. 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. 
    2. 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.
    3. 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)

  • Updates from the UCU Pensions Official

    Please see below for two short updates from the UCU Pensions Official.

    USS Ethical DC Funds

    UCU encourages members with funds in the Investment Builder or Defined Contribution (DC) fund of their USS pension to consider asking USS to invest their money ethically. You can get information on this in USS website at Investment Builder and by logging in. You can also read more on this at DivestUSS. 

    Quilter Financial

    Please note that UCU members have access to Quilter Financial, who will provide independent financial support. You can get further information at UCU – Financial advice from Quilter Financial Advisers.

  • UCU fights and wins on an extension to USS early retirement factor change

    The UCU Superannuation Working Group (SWG) have been engaged with USS since January 2024 regarding proposed changes to the Early Retirement Factors from 01 April 2024. Early Retirement Factors are the percentage reduction applied to a member’s pension if they retire before their Normal Pension Age (NPA). The further you are from NPA, the larger the reduction.

    However, changes proposed from 01 April 2024, if implemented, would have meant a significant difference in pension entitlement between members retiring on 31 March 2024 and from 01 April 2024 onwards. Along with UUK, the SWG Negotiators met USS on a number of occasions to seek a delay to the implementation date. As per this linked USS communication, this change has now been delayed to 01 October 2024.

    This delay is very much welcome and will give members considering Early Retirement the time to look at the finances of such a decision, engage their families, engage employers, and take independent financial advice. But 6-months is not long.

    Given this, UCU would advise any member who is considering seeking early retirement in the next 12/18 months to take steps immediately to assess their options. It may well be that remaining in employment is the best option, but members should seriously consider all options now.

    Financial Information can be obtained from Annual Pension Statements and the MyUSS portal on the USS website. We would encourage members considering early retirement to speak with family and employers now. For those members who see Early Retirement as a real option before 01 October 2024, we would suggest that members engage USS for necessary financial information before seeking independent financial advice. Members should note that UCU has a partnership arrangement with Quilter Financial –  UCU – Financial advice from Quilter Financial Advisers – who may be able to assist.

    While SWG are unable to stop the changes to Early Retirement Factors, this delay is significant as it provides members the time needed to consider all options and take advice. And while they will be continuing to meet USS on Early Retirement Factors going forward, they urge members considering Early Retirement to use this time well.

  • We urge you to complete the USS Pensions Survey

    You (USS members) should have received a survey link via email from USS. We encourage you to complete this survey to get UCU member voices heard. The survey will take around 10 minutes to complete but we feel this time will be worthwhile for the following reasons:

    • You will be asked for your views on sustainable investment. Pension funds can only legally decide to opt for a sustainable investment strategy (divestment from fossil fuels etc) if they have evidence that their members want that to happen. USS have never done an explicit survey on this, so surveys like this one are the best opportunity people have to express that view.
    • You will be asked to comment on your “overall relationship” with USS. This question’s results will be reported in the USS annual report, which will expose the feelings of its members to a wide audience.  

    Further action you can take towards ethical investment

    Most USS members now have a Defined Contribution (DC) pot (the bit USS calls the “investment builder”) because of the 2020-2022 cut to the Defined Benefit (DB) cap. Individuals can choose to have this pot invested normally or invested ethically by logging to the USS portal. Most people don’t know this and therefore leave it with the default (not ethical) option. USS takes this as evidence that members aren’t so bothered about climate change and therefore as a reason not to change investment strategy for the (massively larger) DB section of their investments. So, if you wish to influence USS ethical investment you can opt in to the “ethical lifestyle” investment option.

    LUCU Committee

  • Planned changes to early retirement benefits in your USS Pension

    We have recently learned of changes to your USS pension related to early retirement, which USS plans to make on 1st April 2024.  It is important you understand that if you are considering early retirement, the planned changes to Scheme Factors, if they go ahead, could seriously disadvantage you.

    We believe it would be prudent for members considering early retirement to urgently:

    1. Write to USS seeking the necessary financial information to inform their decision, asking for  calculations for dates before and after 1st April 2024.
    2. Make contact with HR to ensure the necessary work is completed so as not to delay any decision with USS.  This contact from staff enables HR to notify USS and provide confirmation of notice period.
    3. Seek independent financial advice to inform their decision-making. Members may wish to use the free service for UCU members provided by Quilter Financial  UCU – Financial advice from Quilter

    We are reliably informed that the UCU Pensions Negotiators are fighting this change, which was not part of the recent USS negotiations outcome. Nevertheless, at this point in time the change is planned for implementation on 1st April and as the date is drawing near, we wanted to draw your attention to it.

  • Making Sure You Get Your USS Back Pay – Meeting Recording

    The branch held an open meeting on Wednesday 31st January to discuss the recent changes to the USS Pension scheme . While it is important that everyone understands what has been successfully negotiated on your behalf, it is especially important that colleagues who have opted out of USS are aware of the implications of how restoration of the lost 2020-2023 benefits will be implemented. There is a significant financial benefit to joining the scheme before 1st April 2024 that will not apply after that date. All staff on grade 6 and above are eligible to join USS.

    You can view the recording of the meeting here.

  • Important News – USS Changes Explained

    One of the positives from the recent pensions victory is that joining the USS Pension should be more affordable, notwithstanding that we are still in a cost-of-living crisis. From 1 January, contribution rates should lower for employees from the current 9.8% to 6.1%. This means that a person on £30,000 salary should save £1,110 per year in contributions.

    £215 Payback Payment

    To qualify for the £215 pension payment, a scheme member must have active service in the scheme before 1 April 2024. Members need to earn £16,125p.a. to get £215 of pension. This will increase with inflation until retirement and be paid each year in retirement. This means the value of the payment for a person aged 50 now, who retires at 66 and claims their pension for 25 years, is around £13,000 if we estimate average inflation at 3%. However, if a person waits until after 31 March 2024 to join the scheme, they will not be entitled to this payment.

    Accrual Rate & Inflation Cap

    From 1 April 2024, the change in accrual rate from 1/85 to 1/75 will mean that the amount of money going into your pension pot each year will be higher, so your pension will be worth more. Also, the changes to inflation protection from the current max of 2.5% to the soft cap max of 10% means your pension will grow more. The change in threshold for DB/DC means that more money goes to DB meaning members get a better return when they retire.

    LUCU Committee

  • UCU Members Get Results!

    Image credit Aisling O’Beirn – https://aislingobeirn.com/ – @aislingbeirn

    Congratulations to all our members both locally and nationally who contributed to industrial action, forcing our employers to reverse pensions cuts. Your commitment has not gone unnoticed by other members of staff, who have expressed their thanks. This has been a big win for all university employees who hold USS pensions – but it would not have been achieved without our committed members, both here at Loughborough and across the sector. Go to the USS Modeller to see how much better off you’ll be following the restoration of our benefits. 😊 

    Without a committed membership, we have no strength! Our next push is to build on this win by increasing our numbers. So, let’s make a noise about our success! Members talking to colleagues not yet unionised is the most effective way we can recruit. We’d appreciate it if every member would speak to at least three colleagues to encourage them to join us, using this link: join.ucu.org.uk. You can also help spread word of our win and encourage membership by liking and sharing/retweeting these social media posts: Twitter/X and Facebook. The more members we have, the more we can achieve!