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Financial Statements 2011-12 9

The University’s interest-rate management policy is to fix the majority of its interest costs. This is achieved through a mixture of fixed-rate loans and interest-rate swaps. Interest-rate swaps commenced which will have the effect of fixing interest costs over future loan drawings with the ultimate objective of fixing 80% of interest costs.

The University was compliant with the banking covenants listed below and is confident of remaining so in the foreseeable future being not less than 12 months from signing these accounts:

Covenant Definition Debt servicing costs as a %

of turnover I&E Reserve

(excluding pension liability) Ratio of total debt to total funds (excluding pension liability)

Pension Schemes

The University operates three pension schemes. The Universities Superannuation Scheme (USS) is open to all new staff while the Essex County Council Local Government Pension Scheme (LGPS) and the University of Essex Pension Scheme (UEPS) are both closed to new members. USS is a pooled scheme so is accounted for on a defined contribution basis.

On an FRS17 valuation basis, the combined deficits in LGPS and UEPS have increased by £7.037m from £17.3m to £24.4m as at 31 July 2012. Funding levels, on an FRS17 basis, are: USS 82% (31 March 2012), LGPS 64% (31 July 2012) and UEPS 74% (31 July 2012).

USS has also undergone a prolonged review of its cost and benefit structure in order to ensure it can remain financially viable. Changes were implemented in October 2011, resulting in existing members of staff paying increased contributions, rising from 6.35% to 7.5%, while new members of staff will join a new career average revalued earnings section and contribute 6.5% of their earnings. The employer’s contribution did not change.


Requirement 2011-12 <7.0%


Actual 3.9%

>£50m £64.0m <1.0

During 2010, the University undertook a review of the UEPS pension scheme and proposed a number of changes. This followed the results of its actuarial revaluation which would have led to an increase in the employers contribution rate. The changes were implemented in August 2011 following a statutory consultation period. The employee’s contribution rate has increased from 6.0% to 7.0% and the employer’s contribution rate has reduced from 21.5% to 19.4%.

The University has agreed funding plans to cover increases in future service cost and past service deficits of its two closed defined benefit pensions schemes.


Sustainability is a core principle of all of the research, teaching and business activities at the University of Essex. Through these activities, we seek a future for Essex as an educational model for healthy and sustainable living. The University aspires to be one of the greenest in the country, and to act as an exemplar both to other institutions of higher education and to regional bodies.

A Green Task Force co-ordinates and implements the University’s sustainability policy with membership drawn from staff and students.

A newly-formed Sustainability Strategy Group has been established to oversee the University’s Carbon Management Plan, approved by Council on 18 July 2011. The Plan affirms the University’s commitment to making a full contribution to tacking the issue of climate change, supporting the efforts of the UK as a whole and higher education sector in particular. The Plan sets out the following University objectives and targets:

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