Universities U.K., the representative organization for employers associated with the £60 billion ($84 billion) Universities Superannuation Scheme, London, is exploring a number of options, including collective defined contribution, for the future of the pension fund.
The organization published an open letter to participants in the fund highlighting the position of employers associated with the fund in regard to an ongoing dispute over the pension fund. Universities U.K. represents the views of more than 350 higher education employers.
USS has a £6.1 billion deficit, the letter said.
Universities U.K. said it remains open to further talks with University and College Union, which represents participants. The two organizations have been in talks since the beginning of 2017, meeting more than 35 times.
Universities U.K. has been and continues to talk with UCU on the future of the pension fund, the letter said. The two are exploring "alternative models for risk sharing," such as collective defined contribution, although this model is not now possible under U.K. legislation.
Other options include "a well-defined framework for the future reintroduction of meaningful defined benefit if economic and funding conditions improve;" looking at keeping deficit recovery contributions "as low as possible, so that a greater proportion of employer and employee contributions supports future benefits;" and engaging with stakeholders regarding investment derisking to ensure that any specific portfolio derisking approaches "deliver the most benefit for the associated expected reduction in target return."
A two-month consultation period will begin at the end of March, and participants will be asked for their views. "We would like to appeal to you to take the opportunity to put forward any proposals you feel may not have been sufficiently considered. We have sought independent expert advice at each stage of this process, but we are open to the possibility that we have not considered every possible angle," the letter said.