8 December Proposed Merger of OUSS with USS Miles Hedges Finance Director

8 December Agenda Reasons for the proposal Process Timescales Comparison of the two schemes What happens next? Your questions

8 December Reasons for the Proposal Benefits for staff Benefits for the University Cost to the University

8 December Benefits for Staff One scheme for everyone Eliminates the promotion problem Allows staff greater mobility between universities Provides security of a national pension scheme

8 December Benefits to the University Greater stability of its future pension contributions Greater stability of its reported pension costs Remove administrative burden of dealing with more than one pension scheme

8 December Cost to the University The University is willing to pay a premium in order to achieve the benefits for staff and itself There is a limit to the amount of the premium that can be afforded

8 December Process A long and complex process, involving: The University Council – merger approved in principle up to a given financial cost USS Trustees – the merger process and template has already been approved in principle OUSS Trustees – have to be satisfied that the merger is in the best interests of members OUSS Members – have to be satisfied that the merger is in their best interests

8 December Process Discuss proposals with trade unions Put project team in place Inform staff – including this meeting Negotiate terms with USS Take legal advice – both University and OUSS Trustees Take actuarial advice This is a long and complex process

8 December Timescales Sep 2003 – Council decision in principle Oct 2003 – commenced discussions with trade unions Nov 2003 – project team formed; letter to all staff in OUSS Dec 2003 – open meeting for all staff; discussions with USS Jan 2004 – continued consultation with staff Mar 2004 – target date to agree principles of merger Jul 2004 – target date to complete merger if terms and financial conditions are right

8 December Comparison of the two schemes USS National scheme Security based on HE sector as a whole Retirement age 65 Option to retire from active service at 60 OUSS Local scheme Security depends on a single employer Retirement age 65 Option to retire from 60

8 December Comparison of the two schemes USS Pension = 1/80 th of salary for each year of service PLUS Lump sum of 3/80 th of salary for each year of service Can convert lump sum into pension OUSS Pension = 1/60 th of salary for each year of service Can convert pension into lump sum up to Inland Revenue limit

8 December Comparison of the two schemes USS Dependent’s pension = 1/160 th for each year of service Lump sum death in service benefit = 3 x salary Ill health pension = full service to normal retirement date OUSS Dependent’s pension = 1/120 th for each year of service Lump sum death in service benefit = 2 x salary + refund of contrib’ns Ill health pension = service to date + 5 years

8 December Comparison of the two schemes USS Employee’s contribution = 6.35% less tax relief Maximum pension increase = RPI increase OUSS Employee’s contribution = 6.00% less tax relief Maximum pension increase = RPI up to a maximum of 5% in any one year

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8 December Comparison of the two schemes Merger is the last stage in a long process Many changes have been made in the past to bring benefits together – generally these involved increasing OUSS benefits but not always Remaining changes involve some measure of trade-off – in the same way as buying an insurance policy buys peace of mind if things go against you

8 December What happens next? Communication plan: Letter to you Today’s meeting Your questions and our responses Regular progress reports Key dates: March – agree merger principle August – start of your USS membership

8 December Your Questions To the panel now – Philip Marsh, Joe Devlin & Miles Hedges Information and questions and their responses will be posted on Personnel intranet to To your trade union representatives