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VC Crosses the Rubicon Over Pensions

May 7, 2010

UCU members will have received a communication from Sally Hunt detailing the result of 12 months work on revising the USS pension scheme.  This is not just of concern to new members, it could result in the devaluation of many of our pensions.

Quite sensibly, USS, UCU and our employers nationally decided to review the pension scheme with regard to the emerging risks from longevity of members and the volatility of equities.  It was thought until recently that both UCU and management were united in the aim to protect the fundamental deferred payment that is our pension; our security in retirement.

From the start, your UCU negotiators were open to all ideas, bar closing USS.  Even a change to a Career Average Revalued Earnings (CARE) scheme was considered.  They realised pragmatically that for the scheme to continue to be viable there would have to be a cost, and that members would most likely need to carry at least some of that burden.

There has been extensive communication between UCU and USS actuaries and both parties are in agreement that the scheme is not in a dire position. It is in fact one of the strongest and best funded pension schemes in the world, with more cash coming in than is paid out.  Strangely, actuaries for the employers have presented a gloomier slant.  Certainly, a large proportion of the additional costs to USS are coming from the large salaries our leaders pay themselves, which are not funded well enough as these increases have occurred recently. As a means of addressing this issue, UCU proposed banded members contributions where higher earners would pay more.

During the year-long negotiations between UCU and employers’ negotiating teams, closing in April, management have steadily evolved their proposals to those of a more Draconian nature.  Their motive has become clear; they do not have the objective of protecting USS from risk,  they are concerned only with the cost they face and that alone.  This sells valued staff short.

Collectively, the pre-92 employers opted to undermine the whole 12 month negotiation process.  They drew up a new proposal which they hid from the negotiating table and only at the 12th hour chose to circulated this at the meeting set for a final reporting back.  This manifested incredible disrespect for the UCU negotiating team and the independent chair.  To add insult to injury, the document had been circulated to various university management groups for their agreement prior to the final negotiation meeting!  This is evidenced by letters of support from these management forums; including that of the Russell Group, signed by our very own VC. Michael Arthur puts his name to the statement that “for universities to be able to minimise the impact of cost reductions on their staff whilst delivering a high quality experience to their students […] it is essential that pension costs can be controlled”.

All academic and related staff, regardless of membership of UCU, are represented by UCU on this issue. None of us should feel comfortable about our pension arrangements.  It may be that existing USS members look at the proposals and see that the erosion of the scheme represents a small risk, but we should bear in mind that that this year our pensions are also under attack by a derisory pay offer that is little more than an insultingly tiny Christmas bonus, and which is excluded from pension contribution.  Some might be tempted to think we’re safe, that this is just the new joiners to the USS scheme that are to be affected, but we must consider carefully what is meant by ‘new joiner’. If you move to a job that does not permit you to contribute to USS then after a certain period (possibly two years) you will be considered a ‘new member’ afresh. Given these uncertain times, and job security being deliberately threatened at every corner, may of us could end up on a pension that would be significantly devalued if the employers’ proposals are forced through. Of course, we need also to show solidarity with those who will be the future of our disciplines, and seek now to protect their pensions with realistic proposals now that take account of potential future risks and look after one of the best funded pensions schemes in the world.

We should all remember, our pension is part of our pay – deferred to the future. To devalue it is to add a further, quite significant, pay cut to the approximately 3% (in real terms) pay cut we have seen this year, and those we are to be asked to swallow in coming years.

There will be a national referendum on this and we urge all staff to actively engage with it. There is an information giving session next Tuesday 12-1, in the Speakman Lecture Theatre, Clothworkers Central Building.

Read the UCU FAQs on this issue

UCU Pensions page

Download UCU’s Pension proposal (doc file)

Download the employers’ proposal (doc file)

Download the supporting statements from UUK, Russell Group etc. (doc file)

One Comment leave one →
  1. Geoff Brown permalink
    May 7, 2010 1:12 PM

    Robert Maxwell operated on the theory that there was nothing easier to rob than a pension scheme. How much has changed?

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