Universities Superannuation Scheme
Encyclopedia
The Universities Superannuation Scheme is a pension
scheme in the United Kingdom
. Its members include academic and academic-related staff (including senior administrative staff) in many United Kingdom universities
, mainly those that were universities prior to 1992. (Staff in the post-1992 universities
are mostly members of the Teachers Pension Scheme.) It is the second largest pension scheme in the UK by fund size.
However, perceived drawbacks of the scheme were that it did not link to final pay, access was contingent on a medical examination, there was no guarantee for dependents, little provision for risk benefits, and no indexation of benefits. Hence it compared unfavourable to the defined benefit scheme already enjoyed by school teachers under the School Teachers (Superannuation) Act 1918. From 1958 to 1969 several committees were established to review the present arrangements. The recommendations for a DB scheme were initially rejected by Universities in 1960 and again by a committee in 1964, who concluded it was “…unable to make a clear recommendation in favour of either system ”. The Joint Consultative Committee (JCC), established in 1969, commissioned a report from G. Heywood (FSSU Consulting Actuary) that included a proposed outline for USS. It was to be a one eightieth scheme with a three times annuity lump sum, available to new entrants only, no medical examination was required and pensions would not be increased.
A meeting to discuss the structure of USS took place in Liverpool on the 28 December 1970. The proposal for an independent company was approved by the JCC in November 1971, and endorsed by the CVCP in December 1971. The FSSU Executive Committee was “unenthusiastic”. Drafting of the rules began in 1971, with the 7th draft being agreed in August 1973 and circulated to universities along with an explanatory booklet. The scheme was finally introduced on 1 April 1975. Contributions were 16% of salary, with members paying 6% plus a 2% surcharge for back service.
, Shropshire
, prior to its sale to Hark Group and Apollo Real Estate. Other commercial properties in which it has been involved include the Grand Arcade
development in Cambridge
and Forestside Shopping Centre
, Belfast
. The latter was bought from Sainsbury's
for £50 million in 1998 and sold in 2001 for £70 million.
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
scheme in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. Its members include academic and academic-related staff (including senior administrative staff) in many United Kingdom universities
British universities
Universities in the United Kingdom have generally been instituted by Royal Charter, Papal Bull, Act of Parliament or an instrument of government under the Education Reform Act 1988; in any case generally with the approval of the Privy Council, and only such recognised bodies can award degrees of...
, mainly those that were universities prior to 1992. (Staff in the post-1992 universities
New Universities
The term new universities has been used informally to refer to several different waves of new universities created or renamed as such in the United Kingdom. As early as 1928, the term was used to describe the then-new civic universities, such as Bristol University and the other "red brick...
are mostly members of the Teachers Pension Scheme.) It is the second largest pension scheme in the UK by fund size.
History
In 1911 the President of the Board of Education established an “Advisory Committee on University Grants”. This research formed the basis of the predecessor of USS, the Federated Superannuation System for Universities, which was approved by the Board of Education and membership became compulsory for new appointees post 1 October 1913. The basic plan criteria were:- the benefit was an annuity or cash payment through an insurance policy maturing at age 60
- optionally, benefits were available for dependants on death in service
- the policy was held in trust by the member’s institution and was transferable to a new institution if required or to an individual on leaving the University service
- members contributed 5% of salary and the employer matched this until 1920 when the employer contribution was increased to 10%
- administrative staff on salaries comparable to academic staff were also eligible to join.
However, perceived drawbacks of the scheme were that it did not link to final pay, access was contingent on a medical examination, there was no guarantee for dependents, little provision for risk benefits, and no indexation of benefits. Hence it compared unfavourable to the defined benefit scheme already enjoyed by school teachers under the School Teachers (Superannuation) Act 1918. From 1958 to 1969 several committees were established to review the present arrangements. The recommendations for a DB scheme were initially rejected by Universities in 1960 and again by a committee in 1964, who concluded it was “…unable to make a clear recommendation in favour of either system ”. The Joint Consultative Committee (JCC), established in 1969, commissioned a report from G. Heywood (FSSU Consulting Actuary) that included a proposed outline for USS. It was to be a one eightieth scheme with a three times annuity lump sum, available to new entrants only, no medical examination was required and pensions would not be increased.
A meeting to discuss the structure of USS took place in Liverpool on the 28 December 1970. The proposal for an independent company was approved by the JCC in November 1971, and endorsed by the CVCP in December 1971. The FSSU Executive Committee was “unenthusiastic”. Drafting of the rules began in 1971, with the 7th draft being agreed in August 1973 and circulated to universities along with an explanatory booklet. The scheme was finally introduced on 1 April 1975. Contributions were 16% of salary, with members paying 6% plus a 2% surcharge for back service.
Investments
The scheme formerly owned Telford Shopping Centre in TelfordTelford
Telford is a large new town in the borough of Telford and Wrekin and ceremonial county of Shropshire, England, approximately east of Shrewsbury, and west of Birmingham...
, Shropshire
Shropshire
Shropshire is a county in the West Midlands region of England. For Eurostat purposes, the county is a NUTS 3 region and is one of four counties or unitary districts that comprise the "Shropshire and Staffordshire" NUTS 2 region. It borders Wales to the west...
, prior to its sale to Hark Group and Apollo Real Estate. Other commercial properties in which it has been involved include the Grand Arcade
Grand Arcade (Cambridge)
The Grand Arcade is a large shopping centre in St Andrew's Street, Cambridge, England. It is anchored by the John Lewis Department Store, which is situated to the southeast of the site and which opened on 8 November 2007, prior to the rest of the development, which opened on 27 March 2008.It links...
development in Cambridge
Cambridge
The city of Cambridge is a university town and the administrative centre of the county of Cambridgeshire, England. It lies in East Anglia about north of London. Cambridge is at the heart of the high-technology centre known as Silicon Fen – a play on Silicon Valley and the fens surrounding the...
and Forestside Shopping Centre
Forestside Shopping Centre
Forestside Shopping Centre is located in Newtownbreda in the southern suburbs of Belfast, Northern Ireland. The first phase of the centre, the Sainsbury's store, opened in March 1997. The popularity of the centre has exceeded expectations with traffic congestion a problem in peak trading seasons...
, Belfast
Belfast
Belfast is the capital of and largest city in Northern Ireland. By population, it is the 14th biggest city in the United Kingdom and second biggest on the island of Ireland . It is the seat of the devolved government and legislative Northern Ireland Assembly...
. The latter was bought from Sainsbury's
J Sainsbury
J. Sainsbury plc is the parent company of Sainsbury's Supermarkets Ltd, commonly known as Sainsbury's, the third largest chain of supermarkets in the United Kingdom with a share of the UK supermarket sector of 16.5%....
for £50 million in 1998 and sold in 2001 for £70 million.