Equalities Impact Assessment (EIA) Human Resources Proposed Reforms to the USS Pension Scheme a) What is the workforce profile in relation to race, disability and gender according to scheme membership? * Please note that this table is on the basis of current legislation. Institutions may voluntarily wish to extend the number of protected characteristics included in the EIA to include gender reassignment, pregnancy and maternity, religion or belief, sexual orientation and age. Disabled BME Male Female 1. USS Members a) aged under 55 at 1.4.11 17 95 620 534 2. USS eligible members (those not currently in the scheme but who are eligible to join or rejoin) 3. Other scheme members b) 55 or over at 1.4.11 a) aged under 55 at 1.4.11 b) 55 or over at 1.4.11 8 14 186 90 3 19 94 109 1 1 53 37 LGPS a) aged 20 32 222 370 TPS SAT under 55 at 1.4.11 SAUL NHS 1 2 LGPS b) 55 or 10 5 122 115 TPS SAT SAUL over at 1.4.11 NHS 4. Non scheme members a) aged under 55 at 1.4.11 3 23 70 103 b) 55 or over at 1.4.11 1 1 10 18 b) Gaps in data Institutions to identify any gaps in the data and the possible reasons for the gaps.
Form for full Equality Impact Assessment of changes to the USS Name of person completing this form: Job title: Department: Ian Cheetham Director of Human Resources Department of Human Resources Telephone number: 01225 386702 Email address: i.c.cheetham@bath.ac.uk Step 1 The proposed revisions to the USS are as follows: 1. To introduce, with effect from 1 April 2011, a normal pension age of 65 for new entrants and for the future service of existing members under age 55. 2. Existing members over the age of 55 will be exempt from the changes to the normal pension age. 3. Normal pension age will increase in line with any increases to the state pension age. 4. A flexible retirement scheme will be introduced which will be available to members from age 55. 5. The employee contribution rate for members of the final salary section will increase to 7.5%. 6. Pensions in payment will be increased in line with increases in the Consumer Prices Index (CPI) subject to a 5% inflationary cap. 7. Pensions in deferment will be increased by CPI or 2.5%, whichever is the lower. 8. A CARE benefits structure will be implemented for new entrants. The benefits will be based upon a 1/80 th pension and 3/80 th cash lump sum formula. 9. 10. The contribution rate for members of the CARE scheme will be 6.5%. Cost sharing will be introduced and any increase in the joint contribution rate of 23.50% (22.50% for the CARE section) will be shared 35%/65% by employees and employers respectively.
Additional information required For example: Comparability data for the proposed changes to the USS from the other pension schemes to which employees of the institution belong. The data should cover all 10 areas of proposed change and the elements set out below are by way of example. This institution has employees in the following schemes: Scheme Contribution Retirement Flexible retirement Rate(s) age(s) available LGPS 14.3% 65 Yes from 55 TPS SAT SAUL NHS 14.0% 60/65 Yes It is noted that the Hutton review of public sector pension schemes is likely to lead to further changes to the above schemes to achieve longer term cost savings. This means that differences in the current provisions may well be evened out in the future.
Step 2 Analysis of the proposed revisions to the USS Having regard to the duty to promote equality and eliminate discrimination, do the proposed revisions to the USS minimise unfairness? Do they have a disproportionate negative effect on people from different ethnic groups, disabled people, and men and women? In completing the impact assessment using this form, if it is anticipated that the proposed reform will have a negative impact on one or more of the protected groups, note the likely impact including whether there is direct or indirect discrimination and whether such discrimination can be justified, identify the range of options to address it in order to meet the general equality duties, identify the effect of each option, the preferred option and the reasons for preferring it. Possible options include feeding back to the USS on the basis of the impact that the reforms have at this institution that: (i) there should be no change to the proposed reform; (ii) the proposed reform should be adjusted in a particular way; (iii) that it should continue with the proposed reform; or (iv) that it should abandon the proposed reform. Any options chosen must be informed by the evidence available. Evidence may need to be supplemented by consultation, where appropriate, with affected groups. Sufficient evidence will be required to allow conclusions to be drawn. If the evidence is insufficient, consultation with affected groups is likely to be necessary. Institutions must retain a record of evidence relied upon.
1. Proposed reform: To introduce, with effect from 1 April 2011, a normal pension age of 65 for new entrants and for the future service of existing members under age 55. Anticipated impact of proposed reform on existing USS members under 55 Likely impact: There are a higher proportion of women and BME staff who are under 55 in the scheme than women and BME staff who are over 55. As part of the consultation on this EIA one member of staff suggested that there could be a negative impact of increasing the normal pension age for disabled staff on the basis that disabled staff are more likely to retire early; the University does not, however, have any evidence that it is the case that disabled staff retire earlier, other than due to ill health early retirement, which is a separate matter. Abandon the proposed reform or allow existing members to retain a normal pension age of 60. Allow existing members to retain a normal pension age of 60, whilst in current role. : Will enable saving to be realised and change to be implemented without adversely affecting current members Anticipated impact of proposed reform on existing non-uss members under 55 Likely impact: There are a higher proportion of women and BME staff who are under 55 eligible to join the scheme than women and BME staff who are over 55 and eligible to join the scheme. Abandon the proposed reform or allow existing members of staff to retain a normal pension age of 60 if they join the scheme. Neither. : Staff have the option currently to join the scheme and have decided not to take up this option.
2. Proposed reform: Normal pension age will increase in line with any increases to the state pension age Likely impact: The equalisation of the state pension age may have a negative impact on women in that they will have to work longer before being eligible to draw their state pension, however, the November 2010 Institute of Actuaries report indicates that a woman currently aged 65 is likely to live 2.5 years longer than a man. The proportion of women in the workforce over 55 is smaller than the proportion of women in the workforce under 55 but this reflects current retirement preferences, previous recruitment patterns and access to state benefits. Linking the normal pension age with the state pension age will apply equally to men and women but in the future may mean that women have to remain in the workforce for a longer period. There is a higher proportion of BME staff under 55 who will be affected by this change. Abandon the proposed reform. None. : The link to the state retirement age appears to be a logical and reasonable step to achieve the policy objective of ensuring that USS remains sustainable and affordable. The DWP will have considered this as part of their EIA on increasing the state retirement age. Likely impact: The equalisation of the state pension age may have a negative impact on women in that they will have to work longer before being eligible to draw their state pension, however, the November 2010 Institute of Actuaries report indicates that a woman currently aged 65 is likely to live 2.5 years longer than a man.. The proportion of women in the workforce over 55 is smaller than the proportion of women in the workforce under 55 but this reflects current retirement preferences, previous recruitment patterns and access to state benefits. Linking the normal pension age with the state pension age will apply equally to men and women but in the future may mean that women have to remain in the workforce for a longer period. There is a higher proportion of BME staff under 55 who will be affected by this change.
Abandon the proposed reform. None. : The link to the state retirement age appears to be a logical and reasonable step to achieve the policy. objective of ensuring that USS remains sustainable and affordable. The DWP will have considered this as part of their EIA on increasing the state retirement age. 3. Proposed reform: A new flexible retirement scheme will be introduced which will be available to members from age 55 Likely impact: This is an enhancement to the scheme which will benefit members. Likely impact: This is an enhancement to the scheme which will benefit members and be available to non members if they join.
4. Proposed reform: The employee contribution rate for members of the final salary section will increase to 7.5%. Likely impact: This will apply equally to all members of the scheme. Likely impact: This will not apply to non USS members unless they join before 1 April 2011.
5. Proposed reform: Pensions in payment will be increased in line with increases in the Consumer Prices Index (CPI) subject to a 5% inflationary cap Likely impact: This will apply equally to all pensioners of the scheme. Likely impact: This will not apply to non USS members unless they join the scheme. 6. Proposed reform: Pensions in deferment will be increased by CPI or 2.5%, whichever is the lower.
Likely impact: This will apply equally to all deferred members of the scheme. Likely impact: This will not apply to non USS members unless they join the scheme. 7. Proposed reform: A CARE benefits structure will be implemented for new entrants. The benefits will be based upon a 1/80 th pension and 3/80 th cash lump sum formula. The contribution rate for members of the CARE scheme will be 6.5%. Likely impact: The new scheme will apply equally to all new entrants, however the provision that means that staff who leave the current final salary scheme and return to work following a break have to join the CARE section of the scheme may adversely affect women who leave employment due to caring responsibilities or disabled people if they need to take a career break to manage their disability. Allow current members of the scheme who leave employment for caring responsibilities or a reason related to a disability to remain in the final salary scheme when they rejoin the scheme or allow current members of the scheme who leave for any reason to remain in the final salary scheme when they rejoin the scheme.
Allow current members of the scheme who leave employment for caring responsibilities or a reason related to a disability to remain in the final salary when they rejoin the scheme. : This option deals with the disadvantage women in particular may face. Likely impact: This will not apply to non members unless they join after 1 April 2011. 8. Proposed reform: Cost sharing will be introduced and any increase in the joint contribution rate of 23.50% (22.50% for the CARE section) will be shared 35%/65% by employees and employers respectively. Likely impact: This will apply equally to all members of the scheme.
Likely impact: This will not apply to non-members unless they join the scheme.
Step 3 Could the impact identified in Step 2 above be minimised or removed or equality be promoted in some other way? Group BME Action required Disabled Male Female Others (state which) Non-scheme members could be encouraged to join the scheme before 1 April 2011 which would mean they have the benefits of belonging to the final salary section of USS. Step 4 How will the revisions to the USS be monitored in the future and by whom? (consider a five-yearly review of membership demographics and a repeat of the EIA?) A three year review of membership and an EIA will be undertaken by the Director of Human Resources and the Director of Finance Publication Final reporter: Ian Cheetham Director of Human Resources Date: 20 December 2010 Next review date: April 2014