What you've said

We'd like to thank everyone who gave their views on the proposals to change SAUL during the employer consultation.

The views given by affected employees were on three main themes. There are shown below, along with an explanation from the SAUL Negotiating Committee.

You can explore the themes of the consultation in more detail by visiting the Q&A page. This is where all the questions submitted by affected employees and responses were published each week throughout the consultation.

Topic 1

When they start being paid, pensions built up on or after 1 April 2016 will increase annually in line with the Consumer Prices Index (CPI), up to a cap of 2.5%. If the CPI is higher than this, the Trustee may give discretionary annual increases of more than 2.5% once SAUL's funding level is higher than 105%. Employees responded that this means that pensions could lose their value once they start being paid if inflation exceeds 2.5%.

What the Negotiating Committee considered

Ideally this measure would not have been required. The Negotiating Committee made this difficult choice to reduce the risk of high inflation increasing the cost of benefits once they start being paid. The aim of this proposal is to ensure that SAUL remains stable and secure and continues to offer high-quality defined benefits to current and future pensioners.

It's important to note that, once SAUL returns to full funding, the Trustee will have the power to award increases over the 2.5% cap and this may not be a permanent feature of the Scheme in future. 

In addition, the cap only applies to pension built up from 1 April 2016. Any pension you build up before the changes will not be capped at 2.5%.

You'll also build up more pension in the CARE Plan (1/75th of your salary each year you are in SAUL). So, although the increases to pensions in payment will be capped, you'll actually build up more pension in SAUL while you're a member.

In the consultation, affected employees requested more detail about how the Trustee might give discretionary increases above 2.5%. The Negotiating Committee has decided to include the mechanism for giving additional increases in the updated Scheme Rules. Employers will let members know when the updated Rules are available.

Topic 2

From April 2016 members will build up benefits in the CARE Plan, which calculates your benefits in a different way to Final Salary. Employees responded that members will receive a lower level of benefits or have to work for longer.

What the Negotiating Committee considered

The cost of paying promised benefits to members is one of the main reasons for SAUL's deficit. Closing the Final Salary Plan is necessary to reduce this cost.

However, you'll build up benefits from 1 April 2016 at an improved rate (you'll get 1/75th of your salary for every year you pay into SAUL) and where the Final Salary link is broken, and you're under 65 years old, you'll receive an enhancement to your Pensionable Service.

Employer contributions are increasing to 16% of your salary to help cover the cost of paying promised benefits to members. 

Topic 3

The Final Salary Plan will close on 31 March 2016. Employees responded that they joined SAUL expecting to receive Final Salary benefits in the future. Employees commented that they'd like the Final Salary Plan to stay open and allow members to pay more.

What the Negotiating Committee considered

Making changes to the way that benefits are built up in the future is permitted in the SAUL Rules.

Employers and trade unions agreed not to propose an increase to the cost of SAUL membership. This is because pay rises in the HE sector have been relatively low in recent years and, from April 2016, changes to the State pension mean that SAUL members will have to pay more National Insurance contributions. The Trustee will tell members more about what the changes to the State pension mean for them later in the year.

The Negotiating Committee is committed to ensuring that SAUL is sustainable and affordable for members now and in the future. Increasing member contributions would not support this aim, so it wouldn't be possible for members to remain in the Final Salary Plan, paying a higher level of contributions, after 31 March 2016.