USS – explaining the jargon | University of Oxford

USS – explaining the jargon

Any talk of pensions is always full of jargon and acronyms – and what’s more, a lot of these acronyms look very similar. Let’s take a look at what they mean:

USS the Universities Superannuation Scheme, one of the UK’s largest private pension schemes. Oxford is part of this scheme. 

UCU – the University and College Union, a trade union representing many University staff which has been leading pensions negotiations on behalf of employees. 

UUK – Universities UK, the representative organisation for the UK’s universities, which has been leading pensions negotiations on behalf of employers. 

DB – a defined benefit pension scheme, in which benefits are defined in the scheme rules and accrue independently of the contributions payable and investment returns. Most commonly, the benefits are related to members' earnings when leaving the scheme or retiring, and the length of pensionable service. 

DC – a defined contribution scheme, in which the benefits accrued are determined by the value of the pension fund at retirement. The employer or employee or both make contributions on a regular basis. 

JNC – the Joint Negotiating Committee formed of representatives of UUK and UCU, with an independent chair. 

JEP – the Joint Expert Panel, a panel of independent experts set up to review the valuation of the USS pension scheme and to agree principles underpinning the future approach to valuing the USS fund. 

Exclusivity rule - The rule that an institution participating in USS cannot offer another pension scheme to employees. This means that Oxford cannot offer a rival pension to staff unless it leaves USS, which would be extremely expensive. 

Rule 76.4 - This is a legal mechanism in the USS rules which allows USS to impose a valuation on universities if no decision is reached between employers’ and employees’ representatives. 

Annuity– Using a member’s pension pot to buy a guaranteed regular income in retirement. The income can last for the whole of a person’s life or for a fixed term.  

Diversification – Investing in a number of different types of assets in order to limit exposure to any single source of risk. 

Discount rate – This is a way of calculating the present value of a pension, using the assumed investment return of its assets. 

Pension pot – The total amount of money you have in your pension. 

Actuary – A professional adviser able to conduct an actuarial valuation of a pension’s value. 

External audit – An examination of the financial statements of a pension scheme by an individual or firm appointed by the scheme’s trustees. 

Salary sacrifice – A written agreement between employer and employee whereby the employee forgoes part of his/her future earnings in return for a corresponding contribution by the employer to a pension scheme. 

The Pension Regulator has a glossary which explains many more pension-related terms