Some photos from the picket line

Strike advice for students

The UCU, your lecturers’ and academic-related staff union, will be on strike tomorrow, 30 November, alongside 27 other unions nationwide. Your own union, LUU, has expressed support for the UCU and is sending a contingent to the picket line tomorrow. We would ask you to respect the strike, and refuse to cross a picket line.

1. Why are UCU striking?

• The strike on 30 November is in protest at changes to our pensions. Our employers blocked any opportunity to vote on these changes, and when we set up our own ballot for all USS members (whether UCU or not) 97% opposed the changes nationally. The changes themselves are extreme and unnecessary – our pension scheme is one of the most well-funded in the whole of Europe. Recent reports indicate that it still had more money going into its funds than are coming out. It is not a public-sector pension. Our VC has recently, by contrast, seen a 450% increase in his pension fund, paid by the University (and therefore in part by your fees).
• Unlike public sector pensions, which have been hit by a change in calculations to CPI, our pension is linked to CPI AND capped when CPI goes over 5% (It is now 5.2%).
• We are not asking for extra. We are asking to get what we have paid for.

Strike FAQs

What am I expected to do during a strike?

Your union will only take strike action once every other avenue of influence has been exhausted and when your branch officers think there is no other way to make members’ views clear. It is very serious sanction and that’s why we ask that every member observes the strike. Every member who does not observe the strike is directly undermining the union’s bargaining power and making it harder for the union to protect all its members. When we call a strike we ask that members do not come into work and do not reschedule their classes. The best possible thing you can do is contact your local rep and volunteer to help out on the picket lines. It isn’t illegal, it isn’t dangerous and it can be fun.

VC enjoys 450% increase in pension contributions

The VC at the University of Leeds has seen a 453% increase in employer contributions to his pension since 2004, according to information in the public domain. This is on top of, and due to, a 149% salary increase in the same period (by which we mean – to make it clear – he received a 49% increase in his salary, bringing it to 149% of what it was). According to documents published online (http://www.leeds.ac.uk/downloads/), the University paid £13,000 of pension contributions for our VC in 2004/05 and £59,000 in 2009/10.

Add our dashboard to your PC desktop

You could add our dashboard to your browser as its home page – the page that opens when you first open your browser. But, better still, why not actually add it to your desktop, so that it is there ready to use when you log on to your computer. Here is how:

Add our dashboard to your home screen

Yesterday we released our new dashboard for academic members, and it has proven very popular. If you use an iPad or an iPhone, why not add it to your home screen, or nestle it in a folder of other work-related apps?

Use the new UCU dashboard

As part of the roll out of our new local UCU website www.leedsucu.org.uk Leeds UCU have prepared a ‘dashboard’ for academic members of staff. This collects in one place all the links to campus services that are most commonly used in your daily lives. From it, you can link to The Portal and Student Services, The Library and Symplectic, University events and staff/student lists, and lots more. University and UCU news streams in a right-hand column, keeping you up to date with the local news.

We’re happy to hear from Academic-related staff if they would appreciate a similar collection of links.

Why not make the dashboard you homepage, so that it opens each day when you log on and open your browser each morning? You can get the dashboard here.

Pension pig

Cartoon by ’R. Nasty.’

 

 

Calculate your own personal loss

In October 2010, our Vice-Chancellor Michael Arthur made a statement of recommendation about the benefits to all USS members at Leeds in a covering letter to a series of consultation papers concerning the proposed changes to their pensions.

We offer here for download an excel spreadsheet that USS members can use to calculate the loss they will shoulder as a result of these now implemented changes to your pension scheme. This spreadsheet is for ‘final salary’ members, not the new entrants into the scheme, who face the even worse ‘career average’ method of calculating pension. If you were employed before 1 October 2011 and paying into the USS scheme, this is for you. Here is an example of some losses calculated by the spreadsheet:

The spreadsheet you can download here will give you the amount you stand to lose depending on whether you live for 10, 20 or 30 years in retirement, and each of these is matched against four different scenarios of inflation (CPI). You can even input your own prediction of inflation to get a scenario based upon your own optimistic/pessimistic projection of where CPI might go. If CPI stays below 5% for the duration of your retirement, you will make no loss against the current scheme (other than thousands of pounds of additional contributions). Inflation has never been below 5% for more than 18 years in the last two hundred years.

Last week we explained how the annual increases to your pension in payment will be based on a cap on the rate of inflation (CPI). Read that here. Now, you can calculate the loss that you, personally, stand to pay as a result of that cap.

In order to calculate this, you will need some figures from the USS modeller (available here). You’ll need your member number (on your last service statement) and your NI number. Then, once you’ve got your statement online, take a note of these two numbers, which you can then input into the spreadsheet we provide: The existing benefits and the future benefits (the figure given in the ‘future benefits’ in the modeller include the existing benefits – you will see different colours strata in their graphic – so subtract existing from future to have a figure for all benefits to accrue). You can finesse the figures in the modeller by using the slides at the bottom to adjust the retirement age and the final salary that you might expect to be earning.

In our spreadsheet, put the existing benefits in box A and the future benefits in box B. Put your estimated year of retirement in box C and then in the yellow boxes the kinds of losses you face in the given scenario are calculated.

As with the USS modeller, this spreadsheet should not be used as a basis for financial planning. Do talk to a registered financial advisor if you choose to make adjustments to your financial plans for retirement.

If you find that you don’t believe that you can afford such losses, and recognise that they are unnecessarily high, do continue in the action to re-open dialogue on the changes: http://defenduss.web.ucu.org.uk/

Assumptions, caveats and formulae

Turn away now if the maths bores you

Of course, the figures from our spreadsheet are subject to the caveats that USS provide with the modeller. Figures given represent calculations as of your last statement, 31 March, but are the best available for this calculation. The figures you put in include any benefits from AVCs if you included them in the modeller.

The spreadsheet calculations are based on the assumptions you input and extract from the USS modeller for your pension in payment.

Inflation is given as averaged in four scenarios, and a fifth scenario allows you to put in your own inflation figures over 30 years.

The pension loss is calculated thus:

x-y=loss, where x is the pension you would have got in the scheme as it was, and y is the pension you will get under the new scheme.

x and y are calculated for each year over 10, 20 and 30 years for different scenario.

Each scenario creates x by taking a+b (where a is the part of your pension from benefits to date and b is the part of your pension from future benefits) and increasing their sum each year, up to thirty years, by the inflation given in each scenario.

Each scenario creates y by taking a (your pension from benefits to date) and increasing  it each year, up to thirty years, by the inflation given in each scenario. Then it takes b (your estimated pension from future benefits) and increases it by the given inflation in each scenario, subject to the cap after 5%. It then adds a+b for each year’s pension amount.

So, for Excel users, the calculations for any year (where Z represents CPI) are:

To calculate increases to a in any one year the formula is simply -

a+(a*Z)

To calculate increase to b in any one year the formula is less simply -

b + If[Z>5%,(b*5%)+(b*((Z-5%)/2),b*Z]

These then give increased figures for the next year’s calculations of a and b, and so on up to thirty years of retirement.

x-y then gives the loss for each year. These then give the cumulative losses over 10, 20 and 30 years in the spreadsheet.

All of this is based on the declaration of the calculation of pension increases by USS:

“Pension increases for service built up after 30 September 2011 are matched up to 5% a year, however, if official pensions increase by more than 5% then USS will match only half of the difference up to a maximum increase of 10%. So, if official pensions increased by 15%, USS increases would be 10% in that year. Benefits built up before 1 October 2011 will increase fully in line with official pensions.”

We are happy to be corrected on any of these formulae or assumptions, by USS or any individual. We will happily adjust the spreadsheet in accord with any error pointed out to us. If you wish to see the embedded equations in the hidden sheet, you may unprotect the workbook, and ‘unhide’ the calculations sheet.

CPI and your pension

Yesterday, we blogged about the recent rise in CPI (Consumer Price Index) to 5.2% and the relation between that and the CPI cap on pension increases. Today, we want to clarify that further.

On page 11 of the booklet all USS members recently received you will see a section entitled ‘What pension increases can I expect to get?’ There, it explains that the ‘annual increases to official pensions, usually effective from each April, are linked to changes in inflation over the 12 months up to the previous September’. So, as regards next April, yesterday’s published figure of 5.2% applies. The blurb in the booklet here does not explain that CPI is the measure applied, not RPI. RPI is a more honest figure for the calculation of inflation, because it includes the cost of mortgage rises. More of that below.

The USS booklet then goes on to continue to avoid mentioning CPI, and uses ‘official pensions’ as a euphemism, or synonym, for CPI. It sounds more unavoidable, more authoritative, perhaps. So, when the term ‘official pensions’ is used in that paragraph, reproduced here below, you can replace it with ‘CPI’:

“Pension increases for service built up after 30 September 2011 are matched up to 5% a year, however, if official pensions increase by more than 5% then USS will match only half of the difference up to a maximum increase of 10%. So, if official pensions increased by 15%, USS increases would be 10% in that year. Benefits built up before 1 October 2011 will increase fully in line with official pensions.”

Now, let us unpack two things here. Firstly, there is a distinction drawn between everything you have paid in to your pension (and employer contributions) up to last month, and everything you are going to pay in (and the employer). Secondly, there is information about how these two different sets of contributions are going to be dealt with in your retirement. Nowhere does the leaflet give you any examples of this, or offer the calculating formula.

So, it seems, your pension – the sum you get each month in retirement (as calculated on page 9 of the USS leaflet) – will in fact be made up of two parts. One part which will rise each year in line with CPI, and another part which won’t fully. The second part will rise in line with CPI up to 5%, but after that, anything above 5% will only rise by half as much. So, 6% CPI will see a rise of 5.5% in your pension (5% plus half of 1%) and a 7% rise in CPI will see a 6% rise in your pension (5% plus half of 2%). What it doesn’t mention is that 15% is the ‘hard cap’. If CPI goes above 15%, you will not get anything more than a 10% increase to your pension (5% plus half of 10%).

So, in April next year, the recently announced 5.2% rise in CPI will result in a 5.1% rise in the USS pension. Meanwhile, ironically, official pensions will rise by 5.2%, as they don’t have such a capping mechanism.

We believe this is unnecessarily complex and unfair, and should be re-negotiated. And, of course, new members to the scheme now have the ‘career averaging’ method of pension calculation. That’s a whole different blackboard.

Curiously, when we rang USS and asked if it was the case that the pension increase will be calculated two ways, one for contributions before 1/10/11 and one for contributions after, the representative quite confidently said ‘no, everything is calculated according to the limitations on CPI’. Worrying.

By the way, RPI is currently 5.6%, and a more realistic measure of the financial increases people actually have had to shoulder. Some people will tell you that USS had no choice but to switch to using CPI instead of RPI because the scheme follows the measure used by official pensions, and so when official pensions switched to CPI, then our pension had to too. This is partly true, but it was also within the power of our trustees to break the link with official pensions.