Reporter 31/1/01: Twenty-first Deed of Amendment to the Universities Superannuation Scheme: Notice

Twenty-first Deed of Amendment to the Universities Superannuation Scheme: Notice

29 January 2001

The Council gives notice that the Universities Superannuation Scheme has been amended by the Twenty-first Deed of Amendment, dated 12 October 2000.

The Twenty-first Deed of Amendment deals mainly with amendments required to the rules of USS to allow the Scheme to comply with the Employment Relations Act 1999, and in particular the Maternity and Parental Leave Regulations 1999, which came into effect on 15 December 1999.

The amendments recognize (i) the reduction in the qualifying period for additional maternity leave, which commences on the expiry of normal maternity leave (normally eighteen weeks from the expected week of childbirth) and lasts for twenty-nine weeks from the birth of the child, from two years to one year; and (ii) the employee's right to return to work following the expiry of this period, or such longer period of maternity leave as she is entitled to under statute or as a part of her contract of employment. If the employee does not exercise her right to return to work following the expiry of this period then her membership of USS is treated as having ended on either the day following her notification that she does not intend to return to work or the end of her period of ordinary or additional maternity leave or such longer period of maternity leave to which she is entitled under statute or as a part of her contract of employment, whichever is the later.

The amendments also deal with the treatment of statutory or contractual parental leave. During a period of statutory or contractual parental leave, if the member is not in receipt of any pay his or her membership of USS will be treated as suspended. The member will not receive a service credit in USS for the period of time he or she is on unpaid parental leave nor will cover be provided for death in service or ill health retirement benefits. The member can elect to maintain both the employee and employer contributions in order to receive a service credit for this period and maintain death in service and ill health retirement benefits, or he or she can elect to pay a special contribution to USS to maintain death in service and ill health retirement benefit only.

The amendments clarify the fact that a deferred pensioner or pensioner member can elect to cancel an allocation of his or her own pension made in favour of a spouse or dependent; they also clarify the time scales for payments of interest and administrative charges by institutions to USS.

Following an Opinion given by Counsel to the Institute of Actuaries there was some doubt whether the provisions of the Twentieth Deed of Amendment (Reporter, 1999-2000, p. 1009) were valid without a certificate given by the Scheme Actuary, under Section 67 of the Pensions Act 1995, confirming that none of the changes introduced by the amendments in that Deed reduced the accrued rights of members. As a result the amendments of the Twentieth Deed have been restated in the Twenty-first Deed and are reiterated below.

1. With effect from 25 November 1999 the tax free lump sum payable on the death of a member of USS whilst employed by a USS institution has increased from two and a half times the member's Pensionable Salary at the date of his or her death to three times Pensionable Salary.

2. With effect from 25 November 2000 the actuarial reduction applicable to spouse's pensions where the spouse was more than 15 years younger than the member has been removed.

3. The Twentieth Deed also awarded an additional increase of 1 per cent, over and above that which would have normally been paid, to all pensioner members and deferred members as at 25 April 1999. For members who retired after 25 April 1999 the increase will be awarded on a proportionate basis.

4. The Deed also formalizes the practice of USS of paying interest on the late settlement of benefits.

Amendments 1 and 2 above will be applied retrospectively and the USS will be reviewing the benefits of all affected persons.

Full details of the amendments can be obtained from Mrs S. E. Curryer, Head of Pensions Administration, Finance Division, 10 Peas Hill, Cambridge CB2 3PN, Tel. (3)32214.

Table of Contents