£2.9m bonus for USS staff sparks further anger with higher education employees

Britain’s second largest pension provider has awarded a £2.89m bonus to its staff, running the risk of escalating conflicts with higher education employees.

Seventy-one investment staff at the Universities Superannuation Scheme (USS) received a bonus averaging £40,000 at the end of March this year.

The payout has sparked further controversy with the Union of Colleges and Universities (UCU), who have been in negations with employers for over two years over changes to the pension scheme, calling for open ballets for all USS members.

Last month negations broke down, with the independent Chair of the USS Joint Negotiating Committee, Sir Andrew Cubie, casting his deciding vote in favour of the employers.

Changes to the scheme included the removal of the final-salary scheme for new entrants and an increase in the retirement age from 60 to 65. Member contributions were also hiked from 6.35pc to 7.5pc of members salaries.

The USS attributed these changes to financial problems and were enforced to address the deficit after value of the pension fund slipped £8b during March 2008 and March the following year.

UCU have said the recent revelations of the £40,000 bonus payout would raise further questions from staff who are being asked to increase their pension contributions and accept reduced benefits “at a time when the fund's value had increased by billions.”

The union have responded by stating the increased need for a ballot.

UCU general secretary, Sally Hunt, said: "The bonus payout revelations have increased the need for a proper consultation on proposed changes to the pension scheme. There are serious questions to be asked about the need for such draconian changes and, if the scheme is to retain any legitimacy, then there must be a ballot of all USS members."

In a statement the USS said: “Universities Superannuation Scheme is a long term investor and performance-related bonuses are based on five years rather than just an annual period.

“80 per cent of bonuses are performance related and are only paid to managers when benchmarks are met or surpassed over the whole of the five year period.

“Due to a combination of good investment performance in which the internal fund outperformed its benchmark together with favourable market conditions, the fund’s assets appreciated by over £4,000M during the year.

"Good investment performance resulted in increased bonus payments to the London-based investment team.”