An Employers' Aim
A Porky?
In response to a request from Oxford University, USS produced answers to some supplementary questions (to see these click on the link, then scroll down and click on Supplementary information, and then I recommend you scroll further down and click on Question 11). There USS pose the question
- Is the real agenda of the employers, as has been alleged, to reduce their contributions to 10%?
and answer it with
- No. The employers are committed to continuing to pay their existing contribution of 16% (a rise from 14% in October 2009) for the foreseeable future. This will be necessary to meet the additional costs arising from the plan to modify the scheme’s investment strategy, with a shift of the asset mix toward risk reducing assets with lower returns than equities. This is in the employers’ view an essential part of the changes needed to ensure the long term sustainability of the scheme and reducing the recent volatility in the value of the fund.
Rather tellingly this is not consistent with Annex D of JNC 24-10 which was tabled by the employers at the USS JNC in July 2010. This document was withdrawn from general circulation by the EPF when UCU drew attention to para 14 on page 5 which states that:
- 14. In the long term it is possible that the employers' proposed changes will produce savings that will enable the employers' contribution rate to be reduced to a more realistic level during the extended period when university finances are likely be severely constrained. It is impossible to indicate what the likely long term employer contribution rate might be although we believe that ideally it should be closer to 10% - as envisaged at the time USS was first established - although this will take many years to achieve because of the relatively slow transition to the new CARE scheme.
Note the "closer to 10%". One is tempted to conclude that the real agenda of the employers is cost cutting, not sustainability.