Are you preparing for 1 April 2019?

For action

On 23 January 2019, the trustee board confirmed the contributions required to USS under the cost sharing provisions: I.884 USS contribution rate changes.

On 30 January we emailed contributions, pensions and official contacts with full details of the actions you need to take to prepare: Action! USS contributions increases, updated contributions interface guidance.

Cost sharing contribution increases

On 1 April 2019, the first of the phased increases to contributions will be implemented. The remaining increases are due on 1 October 2019 and 1 April 2020.

*The employer and member contributions payable from 1 April 2020, under the 2017 valuation, were revised down by the trustee board on 23 January 2019 from the original schedule, of 24.9% and 11.7% respectively.

Subject to the outcomes of the 2018 valuation, and when it is completed, there may be implications for the implementation of the later phases of contribution rate increases outlined above.

What does the reduction of the employer match mean for employers?

The employer match contribution is reducing to 0% with effect from 1 April 2019. Members are able to make an election now to cancel their match contribution with effect from 31 March 2019.

The March cancellation report lists those members who have elected to cancel their match contribution from 31 March 2019; it also shows any other changes the member elected to make to their additional contributions at the same time as they elected to cancel their match contribution, including any that are effective from the next payroll date.

You should be regularly running the March cancellation and the Additional contribution reports from the employer portal to make sure that you are aware of any changes that members are electing to make.

What do the cost sharing contribution increases mean for employers?

You will need to update the contribution rates on your payroll systems to ensure the correct deductions are made. You will also need to ensure the new rate of employer contributions are paid across to USS. We have updated the guidance for completing the contributions interface files and created some worked examples, to reflect the new rates effective from 1 April 2019. Please be assured that we have not altered the format of the existing contributions interface file or included any additional data items.

If you complete the contributions template manually each month, an updated version will be available for download from the employer portal from 10 April 2019.

What information will we be sending for members?

Next week we’ll send a member email focussing on the changes. It reminds members about the changes to the match and confirms the rate changes with a take home pay impact chart to help them see what the changes mean for them. It’ll also remind them about the benefits of USS.

In early March we’ll send ‘Statutory disclosure of changes to USS’ letters for your members and employee representatives. The member letters will be personalised. We’ll send you further information about delivery and distribution shortly.

Changes to USS that will affect you is a new information sheet that you can give to members joining USS between now and when the changes to USS take effect on 1 April 2019. It’s available from the employer portal.