Universities UK (UUK) and the University and College Union (UCU) have agreed to set up an independent panel to review the valuation that put the Universities Superannuation Scheme (USS) deficit at £6.1bn.
According to Alistair Jarvis, UUK chief executive, “concerns have been raised over the way the scheme has been valued, which has led some to question whether there is, in fact, a very large deficit”.
USS is the largest private sector pension scheme in the country.
It has a defined benefit as well as a defined contribution (DC) section, but was due to become a full defined contribution fund under plans published in November by UUK, which represents 350 universities.
According to the scheme annual report, it had a deficit of £12.6bn, with employers and members warned they may need to increase contributions by up to 7 per cent to maintain their current benefits.
However, this shortfall would be reduced to £6.1bn after the implementation of the UUK reform proposals announced in January, which led to industrial action.
At the time, the UCU announced 14 days of strikes across 61 universities to start on 22 February and run over a four-week period.
The agreement on the set up of an independent panel was achieved at conciliation service Acas talks, UUK said yesterday (18 March).
The panel will consider issues of methodology, assumptions and monitoring, aiming to promote greater transparency and understanding of the USS valuation, the universities said.
It will have an independent chair, involve academics and pension professionals, and will liaise with both USS and The Pensions Regulator.
The terms of reference and panel composition will be announced shortly, and the panel will be asked to report back as soon as possible, it added.
Mr Jarvis added: “I hope it will give assurance that the valuation undertaken by USS has been robust, and boost public confidence in the process.”
UCU rejected last week a revised proposal to reform the DB scheme, which would have seen employers and members pay higher contributions into the scheme on a temporary basis.
Commenting on the panel announcement, UCU general secretary Sally Hunt said the union will “of course look at any proposals UUK makes”.
She added: “UUK really need to work much harder to win the trust of university staff.
“We remain available for talks, but what is really needed is a much-improved offer which retains a decent, guaranteed pension income in retirement, and addresses our concerns about the valuation of the fund.”