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It’s cheaper to make people redundant…

July 17, 2010

…if you shift the cost of the Early Retirement Funding charge for those made redundant onto the worker.

And that’s why our employers have embedded that into the recent pension change proposals.

We’ll begin to reveal more of the devil in the detail of the small print of the employers’ proposals here on this blog over the coming weeks.


  • Only employers so far have been consulted, not employees. Your union thinks you should be consulted over your future.
  • In a ballot of members in May this year, 96% of voting UCU members voted to reject the employers’ proposed changes, with a similar number backing UCU’s alternative proposals to share costs between employers and staff.
  • £627,000 of taxpayers’ money was used to support the employers in preparing and pushing their proposals.
  • Some could get up to £127,000 less in pre-tax pension income under the new proposals
2 Comments leave one →
  1. In the abscence of Facts permalink
    July 21, 2010 8:51 AM

    where does it say in the employers proposal that the ERFC will be shifted onto the Employee?????

    – A formal consultation exercise of at least 60 days is required by statute. This will involve 400 employers and cover both the 130,000 current USS members as well as prospetive members. This process will only be initiated following the USS Trustees meeting on 22 July. If they assent to the proposals then they will ask the employers to initiate the consultation exercise.

    – UCU balloted around 30,000 of its members. USS has 130,000 active members, therefore UCU balloted only around 25% of the USS membership. You are correct in stating that the employers have not suggested any change on the employee representative side, but there is a sense that it would at least be in UCU’s interest to include another union in the interests of democracy as this would allow the pool of members that could be contacted to be widened. As to the UCU opinion poll, given the distortion of the facts (the £127k you continue to quote being the prime example) coupled with a binary vote which did not allow for any comments, the result of the poll was hardly a surprise.

    Having read through the various bid applications on the HEFCE website it appears that only a portion of the funding is in relation to work on USS, with the funding also being targetted at work on TPS, the Local Governement Schemes as well as the University specific Self-Administered Trust schemes. I would assume that HEFCE will have provided guidance to the employers on what they expect for their money.

    And what about the £1.5million that UCU has taken from USS in the form of trustee/directors fees. What has UCU spent that money on.

    As to the £127k myth, the figures I have seen from the employers side give a range of £23k worse off to £21k better off under CARE Vs Final Salary over the period in retirement. As with the UCU figures produced, a certain skepticism should be applied as no two individuals have the same career and as a result a like-for-like comparison is never going to be acheivable. It could be argued that UCU have taken the worst case, and not included certain figures, and that the employers have taken the most optimistic scenario.

    I would still request though that if you are to defend the £127k figure that UCU need to answer two basic questions; where is the lump sum? how is the figure of £15,704 derived?

  2. Another academic permalink
    July 22, 2010 1:21 PM

    Read the notes on the UCU calculation page:

    Note: Unlike under the current final-salary arrangements, the employers’ proposals under CARE make no provision for the automatic payment of a lump sum at retirement. Therefore, in order to make a fair comparison, the calculation assumes that the lecturer decides to maximise his/her pension provision by not taking any lump sum.

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