Defined BenefitJun 4 2018

Southampton Uni closes pension to new members

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Southampton Uni closes pension to new members

The University of Southampton will close its low-paid staff defined benefit (DB) pension scheme to new members at the end of December.

However, current members will keep their benefits, as a proposal to replace the final salary plan for a defined contribution (DC) plan were abandoned, after a consultation and union action.

The Pension & Assurance Scheme for Non-Academic Staff (PASNAS), has 2,080 active members – which include cleaners, caterers, librarians, administrators, exams officers and other low-paid workers.

The university put forward a proposal to close the defined benefit scheme in January, which would leave a typical employee in mid-career with a pension two-thirds lower, unions said at the time.

At the end of July 2017, the final salary scheme had a deficit of £104.5m, according to the university annual report.

The latest triennial actuarial valuation, conducted in July 2015, showed that the scheme had an 81 per cent funding ratio.

Adrian Dolby, a representative at Unison, said: "We welcome the change as a massive step in the right direction.

"But we will keep campaigning for improved pensions for all. Everybody deserves a decent pension."

Glyn Jenkins, head of pensions at Unison, added this was a significant victory, which showed that "when we engage enough staff, change is possible".

A similar change was initially proposed to the university staff pension scheme - Universities Superannuation Scheme (USS) - the biggest private final salary plan in the UK. 

The scheme has a defined benefit as well as a defined contribution section, but was due to become a full defined contribution fund under plans published in November by Universities UK (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 by £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.

In April, USS members have approved proposals aimed at resolving the current pensions dispute, hich include a guarantee that the DB element of the scheme would be maintained while a joint-expert panel considers the valuation of the pension fund.