Academic staff enrolled in the Universities Superannuation Scheme, London, will see an increase in the employee contribution rate to 8.8% from 8% of salary and the employer rate to 19.5% from 18% starting April 1, according to the Cambridge University website.
Under current rules, if plan sponsors of USS and plan participants, represented by University and College Union cannot agree on how to adjust benefits to cover funding shortfall, the trustee of the plan can impose any changes to contribution rates it deems necessary to complete the disputed 2017 valuation of the £60 billion ($77 billion) pension fund.
Further increases in the employee contribution rate to 10.4% and 11.4% are set to take place in October 2019 and April 2020, respectively. Employer contribution rates will also increase to 22.5% and 24.2%, respectively.
However, a new set of valuation assumptions and contributions is expected to come into effect before October 2019, following an evaluation by an independent panel in September, which concluded that USS' total contribution rate should not exceed 29.2%.
In response to panel's report, trustees agreed to undertake a 2018 valuation. U.K. universities have until March 15 to provide feedback on the new proposal. The trustee will then consider the feedback and seek to finalize new contribution rates during the second quarter of 2019.
"The recommendations of the joint expert panel have been supported by both UCU and the employers and provide a fair and sensible way of resolving the current dispute," a spokesperson for the University and College Union said in an emailed comment. "It is vital that all parties, including USS itself, engage positively with the (panel's) findings. UCU's priority remains to protect our members' hard won pension benefits both now and into the future."
USS will also discontinue matching additional voluntary pension contributions worth 1% of salary beginning April 1.