26 October 2026 
Julia Ascott, Employment taxes specialist
Welcome to our October pensions update. This month sees continued focus on the USS 2026 valuation, growing debate around the use of anticipated TPS cost savings, and signs of improving funding positions across several schemes. We also cover developments from SAUL, the NHS Pension Scheme and the wider pensions landscape.
UCEA's consultation on the USS 2026 valuation, involving 81 employers representing 93% of active membership, found strong support for the proposed valuation approach and unanimous backing for USS remaining an open scheme.
The overriding message from employers was a desire for stability. Most respondents favoured retaining the current surplus as a buffer against future risks, with 95% highlighting the importance of avoiding future deficits. Views were more mixed on contribution rates, with some employers preferring to maintain current levels and others supporting a reduction. Overall, employers prioritised long-term financial resilience and predictability over immediate benefit improvements or contribution reductions.
For more details and links to the UCEA consultation response, view our article here.
You can also access a recording of the USS Institutions Meeting from 9 October here, where members of the Trustee Board and Executive teams updated employers on the Trustee’s performance and priorities before holding a panel Q&A.
Marsh's Higher Education Group has produced a summary of the response to UCEA's consultation on the USS 2026 valuation, drawing out the main messages from employers and outlining the issues likely to shape the next phase of discussions.
BUFDG recently sought clarification from USS on the treatment of employees working overseas and the potential implications for USS membership and benefits where eligibility issues arise.
USS has emphasised that these cases are often complex and must be considered on their individual facts and circumstances. Employers with specific cases are encouraged to engage with USS directly, and USS has confirmed that it is happy to discuss individual situations informally at an early stage. We have set out the key points highlighted by USS here.
UCEA are seeking applications for a non-executive director to join the Board of the USS. If you are interested, you can find out more information here.
USS has published a member quiz testing knowledge of pension benefits and a retrospective on the first 10 years of the Investment Builder defined contribution section.
The latest LGPC bulletin includes updates on the review of local government reorganisation in England, progress towards pensions dashboards, the release of a further batch of updated GAD factors following the SCAPE review, and continued work on the McCloud remedy in the NHS Pension Scheme. It also highlights a new website for LGPS administrators and employers, together with updates from the Scheme Advisory Board and The Pensions Regulator.
A member has raised a query regarding requests from external auditors for detailed LGPS investment information, such as custodial listings and underlying holdings. There appears to be some variation in the information being made available by administering authorities.
If your institution has received similar requests, or has experience of how these have been addressed, please join the discussion and share your experience.
UUK's budget proposal submission included the (now) standard plea regarding greater flexibility for universities obligated to offer TPS. You can download and read the full submission on UUKs site but the full section on their TPS comments is reproduced on the BUFDG website for ease. Research Professional News also picked up the story here.
The National Education Union (NEU) has called on the Chancellor to allow schools to retain an estimated £3.3 billion annual saving arising from reductions to employer contributions under the Teachers' Pension Scheme (TPS). The union says the funding could help address ongoing budget pressures; support staff pay costs and protect jobs.
TES are a little more sceptical of additional funds, explaining that as an unfunded scheme, it’s not whether schools can ‘keep’ the £3.3 billion but whether the government will make an extra £3.3 billion funding commitment.
The NHSBSA has identified pension administration issues affecting some members of the NHS Pension Scheme and is reviewing records to determine the impact. Universities with staff in the scheme may wish to be aware of the review, although no action is currently required and affected members will be contacted directly. NHSBSA says most members are unaffected, and pension payments continue as normal.
SAUL has published its 2026 Annual Review, reporting that the scheme remains in a strong financial position. The most recent funding review showed a surplus of £278 million, with assets covering 111% of liabilities, and contributions continuing to exceed the cost of future benefit accrual.
Looking ahead, SAUL says discussions are underway on reducing employer contribution rates and considering potential improvements to member benefits as part of the 2026 valuation process. The review also covers preparations for pensions dashboards, celebrates SAUL's 50th anniversary, and notes the rebranding of the defined benefit section as SAUL Lifetime.
SAUL has published a range of member updates, including guidance on retirement planning, reassurance following a recent third-party software security issue, and news that it has joined an investor coalition calling for greater shareholder oversight of FTSE 100 companies' climate transition plans.
UCEA talk USS update and their focus on the gender/equality pension gaps. If you are a UCEA member, you can access their excellent newsletter from the website.
There's some welcome positivity in John Ingoe's (First Actuarial) latest article on university pension disclosures, especially with his first key finding titled, "Things are looking up".
Reviewing the 2024/25 pension disclosures of 29 universities sponsoring their own defined benefit pension schemes, the article finds that funding positions generally improved during the year, driven by higher bond yields, investment returns and employer contributions.
However, the picture varies significantly between institutions. While some schemes are now reporting surpluses, others continue to face deficits and could see increased contribution requirements under The Pensions Regulator's new funding regime. The analysis also notes that university DB schemes remain, on average, less well funded than the wider UK DB pension universe.
Following confirmation that the earnings component of the triple lock is expected to move from annual wage growth to a percentage of median earnings after the current Parliament, likely from April 2029, Torsten Bell set out the rationale for the change at the Pensions UK Annual Conference. Pensions Expert has more.
The IFS has commented on how the ‘new’ triple lock will work, a comparison to the ‘old’ triple lock and what effects it might have.
The DWP has launched a call for evidence on State Pension deferral, seeking views on why people choose to delay claiming their State Pension, how well they understand the options available, the factors influencing their decisions, and any barriers or challenges they encounter. The exercise is intended to strengthen the government's evidence base on how State Pension deferral works in practice and does not propose any specific policy changes at this stage.
Pensions Expert highlights concern that some divorcing spouses could lose out by around £33,000 due to the way certain defined benefit (DB) pension schemes calculate and implement pension sharing orders.
HMRC update online tool
HMRC has updated its online tool that helps individuals estimate whether they may need to pay Income Tax on their pension income. The calculator may be particularly useful for employees approaching retirement, drawing pension benefits while continuing to work, or considering flexible retirement arrangements. Employers may wish to signpost the tool as part of their wider financial wellbeing or retirement planning communications.
PPI – National Pensions Tracing Day
It's also a good opportunity to remind employees to check for any lost pension savings. The Pensions Policy Institute estimates that over 3 million pension pots, worth £18.7 billion in total, are currently lost. Employees who have moved between employers may be particularly likely to have pension pots they have forgotten about and may want to make use of the government’s Find Pension Contact Details tool.
Eversheds Sutherland's latest Hot topics in pensions covers a range of developments affecting education employers, including the reduction in TPS employer contributions from April 2027, proposed changes to TPS regulations, new DfE approval requirements for alternative pension arrangements, and preparations for the increase in Normal Minimum Pension Age from 55 to 57. The briefing also highlights forthcoming restrictions on pension salary sacrifice arrangements and a recent Pensions Ombudsman case reinforcing the importance of accurate pension records and payroll reporting.
We are pleased to be hosting a series of pensions webinars for our members throughout the year, featuring sector-specific content and practical resources tailored to higher education institutions.
Our next (online) session is with Howdens who will be providing pensions update for all BUFDG and UHR members on Tuesday, 10 November at 10.00am. Find out more and register your place here.
If you missed the session from Law Debenture and the Education Pensions Club on self-administered DB schemes, you can catch up with the recording and access the slides here.
