Universities Superannuation Scheme, Liverpool, England, on Thursday approved a benefits reform proposal that would cut costs by hiking contributions for existing members and reducing new member benefits.
Proposed changes announced by the £28 billion ($41 billion) scheme include raising existing employee contributions to 7.5% of annual salary from 6.35%, raising the retirement age for new members to 65 from 60 and introducing a career-average funding formula for new members.
The University and College Union has said its members will strike if the proposals are implemented.
However, the Employers Pensions Forum for Higher Education, which represents the 400 employer members of USS, says higher education schools need to reduce benefits because of cost pressures from rising longevity and salaries, and uncertain investment returns.
Employers must now start a 70-day consultation process with the 130,000 members of the USS. The consultation is expected to end in December, when the USS board of trustees will again vote on the reforms.