Benefits restored in full today for members of UK's largest pension fund

The restoration comes after 瓜神网 members took 69 days of strike action in defence of the scheme and two years after employers forced through cuts that meant guaranteed benefits were slashed by 35%.

The changes mean that as of today ^[1]:

• the accrual rate jumps from 1/85 to 1/75
• the defined benefit threshold increases to over 拢70k, up from 拢41k
• the hard inflation cap of 2.5% has been removed.

An additional one-off pension payment of around 拢900m has also been made to help make good the money members have lost since April 2022. The restoration and one-off payment mean an extra 拢16-拢18bn will now go into pension pots ^[2].

In January, employee contribution rates also fell from 9.8% to 6.1%. That alongside the increase in benefits means a typical USS member will be around 拢150k- 拢200k better off ^[3].

Last month, university employer body, Universities UK,  to the government urging it to allow post-92 institutions to leave the Teacher's Pension Scheme (TPS). 瓜神网 responded by saying it would be "catastrophic" for the sector and that post-92 universities must continue to offer TPS to academic staff.

瓜神网 general secretary Jo Grady said: 'After balloting, campaigning and standing on the picket line for 69 days, today's historic victory belongs to our members. They have done what many said was impossible and won their pension back.

'But just as we have won one battle, employers are now signalling they want to leave the industry standard pension scheme for schools, colleges and post-92 universities. Any institution that thinks it can rob workers of their retirement benefits needs to think again. We will defend TPS with exactly the same tenacity that saw us win back our USS pension benefits.

'This victory shows workers everywhere what we can achieve when we stand together. 瓜神网 will not stop until higher education employers properly value their staff.'

Notes 

[1] Full details of the restoration:

• reinstates the previous accrual rates of 1/75 and 3/75 (lump sum).  
• increases the defined benefit (DB) threshold from 拢41,000 annual salary back to where it would have been had changes not been implemented, at 拢70,296.
• removes the 2.5% pa cap on pension increases before and after retirement and replaces it with the soft-cap that was in place before April 2022.

[2] Using USS consultation modeller data from 2020 cuts, 瓜神网 estimates that a return to pre-2022 benefit arrangements with improvements in accrual rate, an increase to DB threshold, and reintroduction of the soft cap inflation protection will provide an additional 拢15 to 17bn in future member benefits, received at the point of retirement. The additional 拢900m one-off payment will therefore see a total increase of up to 拢18bn into pension pots. 

[3] 瓜神网 estimates that a member with the USS average salary of just over 拢48k, aged 43 and with 8 years' service and taking a CPI average at 3.0%, who claims their pension for 25 years, would benefit as follows: 

• total additional pension in retirement (when compared against cut 2022 rates) including:

  • restoration and augmentation - about 拢140k 
  • reduced Contributions - about 拢38k 
  • additional DC Pension - about 拢6k 
• total - 拢184k 

We would therefore estimate that average members will benefit from between 拢150-拢200k in reduced contributions and future accruals in retirement.