National dispute: pensions
Today saw UCU open three ballots for industrial action here at the University of Leeds. One is for our local dispute (see previous posts). Two other disputes are national: one on pay and job security (see this post) and one over proposed changes our pension scheme, the USS.
- Many of us really do not really consider our pensions until that happy time comes when we can retire from our work at the University. At that point we require an income to replace our salary, even if we do volunteer some of our time to continue supporting those PhD students who have yet to submit and maybe finish that bit of lifetime research off. So it’s only really at the time that most of us really look at our pension provision. Do the employers think, therefore, that we will not notice or, worse, “care” about changes to how the scheme operates until that point? Pensions are deferred pay – they are portions of our salaries that are extracted to support us in retirement.
- The USS is still an ‘immature scheme’ (that is to say it has more money going in than coming out). The investments it has are not currently being cashed in. Of course, the investment market did take something of a blow in recent years, and while none of us have a crystal ball we do all know that the market runs in cycles. This attack by the employers’ representatives on USS started at a time when things did look glum. The employers had seen their contribution to USS increased by 1 % and the stock market looked to be in need of a parachute to halt its free fall. Since then, the USS scheme appears to be on the up and is now nearly fully funded once again. UCU negotiators offered that we – the members of USS – would increase our contribution by 1 % in what was a measured response to concerns that the fund might not cope with us living longer in retirement without such increased input.
- The creation of a two-tier system proposed by the employers could simply result in a division amongst the members of USS. Might this be by design? Existing members might be encouraged to adopt an ‘I’m alright Jack’ attitude, believing that the proposals will only affect new members to the scheme, but what will happen in a few years when there are more ‘new starters’ than us old timers. Can we trust the employers not to argue that it’s too costly and complicated to run two parallel systems? If we fail to protect those who might become ‘new starters’ will they feel bound to protect us when the two-tier system is later questioned? (Of course, existing members can easily become ‘new starters’ – see below – and our existing arrangements are, in fact, also being attacked.)
- At the start of negotiations between the employers and USS on the future of USS it was recognised that some changes were needed (look back at the UCU proposals – there was never any UCU argument for maintaining the status quo).
- We should also distinguish between other public sector workers’ pensions; ours is a private funded scheme, we pay for it all in deferred salary. It is our pension scheme.
- Whilst the USS board has taken some concessions (below) back to the employer, they are not enough. What remains is still very damaging. The UCU want the ballot to be a resounding ‘yes’ vote to both questions so that the UCU and the employers’ representatives will get back around the negotiating table.
There has recently been some movement from the employers, perhaps as a result of the resounding dissatisfaction of USS members in the recent poll (96% rejecting the employers’ proposals). Here at Leeds, the University posted a response here on campusweb. These adjustments to the employers’ proposals are good, but too little too late. Let us explain why, and why we certainly still need to ballot on this issue:
- The caps (5 % but some lower) that were proposed to be placed on the inflationary up-lift (annual pay rise whilst drawing pension) was lifted to 10 %. Yes, this is more generous but the question remains why have a cap at all? If the cost of living increases, should not your pension rise to meet the additional burden?
- Rejoining the scheme after 6 months meant you would become a ‘new starter’ (a potential trap for new mums) in the employers’ proposals. This limit would be moved to 24 or 30 months. An improvement, but this will still represent a trap for those who wish to expand their career experience outside of a USS institution.
- Staff promoted into USS eligible positions within 24 months of new conditions starting would be able to join the original final salary scheme, and not the new ‘care’ scheme. This, surely, is an admission as to how poor the new arrangements are.
- RPI vs. CPI. The employers’ proposed that CPI was to be hard-wired into the scheme so that pension increases (for pensions in payment) would be ‘inflation proofed’ (employers’ term) in line with increases in CPI, subject to a 5% inflationary cap (see above on the cap, and see our original post on CPI). It is proposed that instead of tying the scheme to CPI, it continues instead to follow the government’s requirements on public pensions. This would be great if, for example, the government were to change to CPI+house prices, but if the government seeks to use and even less fair measure of inflation that would have a detrimental impact.