1. 8 December 20031 Proposed Merger of OUSS with USS Miles Hedges Finance Director

2. 8 December 20032 Agenda Reasons for the proposal Process Timescales Comparison of the two schemes What happens next? Your questions

3. 8 December 20033 Reasons for the Proposal Benefits for staff Benefits for the University Cost to the University

4. 8 December 20034 Benefits for Staff One scheme for everyone Eliminates the promotion problem Allows staff greater mobility between universities Provides security of a national pension scheme

5. 8 December 20035 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

6. 8 December 20036 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

7. 8 December 20037 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. 8 December 20038 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

9. 8 December 20039 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

10. 8 December 200310 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

11. 8 December 200311 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

12. 8 December 200312 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

13. 8 December 200313 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

14. 8 December 200314

15. 8 December 200315

16. 8 December 200316

17. 8 December 200317

18. 8 December 200318

19. 8 December 200319 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

20. 8 December 200320 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

21. 8 December 200321 Your Questions To the panel now – Philip Marsh, Joe Devlin & Miles Hedges Information and questions and their responses will be posted on Personnel intranet Email to pensions-merger@open.ac.ukpensions-merger@open.ac.uk To your trade union representatives