A consultation on governance reform of the Universities Superannuation Scheme (USS) gets underway today with the more than 340 employers member of the beleaguered pension scheme as plans gather pace for a full review of its management.
A review was a commitment of employers’ support for a financial package to resolve the 2020 valuation. The UUK-initiated consultation will establish the terms and scope of a governance review, which will be informed by “independent expertise” and led by an “independent chair”.
UUK interim chief executive Chris Hale wrote to the general secretary of the University and College Union (UCU), expressing his “sincere hope [the union] will feel able to participate in the review”.
In a letter to employers, inviting their views on reform, Hale said current governance structures had “largely withstood” recent challenges, and the scheme “remains one of the very best in the private sector”.
The review is timely given the “complexities of the scheme have increased substantially in recent years,” he said, “and the expectations of employers and members of those who are involved in the scheme and who make decisions have grown”. The pension scheme governance is unchanged since the scheme was founded in 1974.
The review would not be “a forum to re-run the events of the last few years”, he assured employers.
In his letter to the UCU, Hale acknowledged “sensitivities around some areas of scheme governance… which have been at the very centre of the stresses upon the scheme in recent times”.
University Business has contacted UCU for comment.
The review would consider actuarial valuations, the outcomes of which have proved a sticking point in recent years, and the relationship between the USS Trustee, who manage the pension finances, and the Joint Negotiation Committee (JNC), where union and employer representatives debate substantive issues, including how to resolve deficits.
Hale said the review would even consider the “role and effectiveness” of the UCU and UUK as representative bodies “because it is right that these things are included”. The USS Trustee would also be invited to participate.
Of the list of topics for the chair to consider, UUK proposes the scheme’s mutual structure, the accountability of the Trustee, appointments to the governing board and JNC, and covenant support measures. The chair would also consider scheme exclusivity rules, which currently mean the “USS must be offered as a workplace pension to the exclusion of other schemes”, and “examine the benefits of this provision but also the risks and opportunities which might exist if this restriction were lifted”.
In documents released alongside the announcement, UUK said: “We believe that the active participation of both the USS Trustee and UCU will enhance the review because they both have a central involvement in the scheme and can bring unique views and perspectives to the review.
“We would not expect any party to have a veto over whether any recommendations can be made by the review, with the Independent Chair being encouraged to be searching about all aspects of scheme governance (and not least those elements, which are within the domain of the employers).”
In June, the USS has suggested the possibility of pension benefit improvements after a recent assessment indicated “a significantly improved financial position”.
In a sign that recent industrial unrest may continue into the next academic year, UCU recently confirmed it is pursuing plans for a national aggregated strike ballot of university staff over pay, conditions and pensions.
The Russell Group has supported the UUK’s call for an independent governance review of USS, believing the Trustee must become “more accountable, transparent and collaborative with the sector”.