Previous claims of £26.1 million shortcomings in the University of York Pension Fund have been brought to light once again, despite proactive measures having been set in place since October.
The University of York claimed to have had a deficit of £26.1 million to their pension fund, by July 2009. To compensate and combat these shortcomings, the option of making a 3.6 per cent less pensionable salary contribution to an individual’s pension, was introduced in October.
This is now being referred to as the “lower tier” with an accumulative rate of 1/85th, as opposed to the previously set rate of 1/60th to the individual pension, despite having already existed within the University of York Pension Fund scheme for four months. This accumulative rate is “the proportion of salary that is received for each year of service”.
Today, the North Yorkshire County Council Pension Scheme Triennial Actuarial Review has taken place. Discussions may govern how much money the Council will give to The University of York Pension Fund in the coming years.
The University of York Pension Fund is an option available to employees of the University who are not eligible to going the Universities Superannuation Scheme (USS) which the University of York is part of. The shortage will therefore not affect academic staff, who are entitled to the USS.
The stipulations for eligibility on the University of York Pension Fund are to be aged between 18 and 60 and also be “either a permanent employee of the University (or a participating subsidiary business” or “a fixed term employee and the University agrees to your membership”. Those eligible include administrative and support staff.
As of October 2009, the Fund has comprised of two rates of salary contribution (before tax calculation) to pensions; 3.75 per cent and 7.25 per cent, “deducted from your pay each week or month until you retire, leave service, leave the scheme or die.”
Non-academic staff on the scheme automatically join at the lower ‘tier’ and after two years full-time employment may choose to move up to the higher ‘tier’ of contribution. Those within the scheme also have the option in the October of every third year to switch between the ‘tiers’.
The current pension calculations within the scheme upon the grounds of ‘normal’ retirement: “Total years of pensionable employment in the higher option (including all your pensionable employment up to 1 October 2009) ÷ 60 x your final pensionable salary plus your total years of pensionable employment at the lower option ÷ 85 x your final pensionable salary.”
York St John University are facing under half of the shortage, with a lack of £12.99 million.