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VC enjoys 450% increase in pension contributions

November 28, 2011

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.

VC pensions increases

Leeds VC employer

Last week we discovered that, rather than us all being “in it together”, salaries for Britain top paid jobs had increased disproportionately against those of the lowest paid. The High Pay Commission described top salaries as ‘corrosive’ (source) and the Institute of Directors described them as ‘unsustainable’ (source). The argument that these salaries are in some way connected to rewarding performance has long been exploded as something of a convenient myth.

Even Vince Cable was ‘taken aback’ by the rate of increase of VC’s pay in the UK, saying last year that it bore ‘no relation’ to the economic situation the country finds itself in. ‘There is some gap between reality and expectations in some of those institutions and […] we want to signal to them that there has got to be some restraint’ he told VCs (source). Their pay increases seem to suggest they took scant attention, whilst together (with some noble exceptions) they agreed on huge levels of debts for future generations of students.

Some still argue that, for fear of a brain drain of University leaders abroad, we need to sustain high salaries at the top of Universities, including salaries of over three times the Prime Minister’s, as we do here at Leeds. Some would however argue that leading the march on the massive increase in students’ fees, decreasing student numbers, and the disenfranchisement of many hopeful students from lower income backgrounds is very poor performance indeed. UK students who will now have to pay the highest public University fees in the world (source), and spend a lifetime paying back up to £130,000 in debt, including interest (source: Martin Lewis), might hopefully begin to question the wisdom of such high salaries (currently £50 per student pays for just the VC’s salary, before we consider the cost of other top table salaries. As student numbers decrease, as is planned at Leeds, that per-student figure will soar).

Our VC has been at the forefront of arguing that we deserve to pay more, gain less and work longer for our USS pensions. But, if you had seen a 450% increase in your contributions before the cut-off date when future contributions would begin to be capped, would you be concerned?

And remember, just like public sector pensions, ours will now be calculated using the CPI measure instead of RPI; just like the public sector pensions, we are paying more each month, like the public sector, we are working longer for those pensions (default retirement at Leeds used to be 60, it is now 65) but unlike public sector pensions, our increases are not going to continue to rise in line with CPI (ours get capped once CPI reaches 5% – it is currently 5.2%).

Download our pensions calculator if you want to work out exactly what your own personal loss in retirement might be (note, this calculator does not even include the loss due to the switch to RPI. But be prepared to be shocked – this is not a generic loss, but this calculates the loss you yourself stand to lose based on the information you input).

When you strike on Wednesday, you are not only supporting the union in trying to get a decent negotiation in progress over your pension arrangements, but you are adding your voice to members of 27 other unions.

University of Leeds's pension pig

32 Comments leave one →
  1. November 28, 2011 12:50 PM

    Could you, please, give the full urls for “the documents published online (http://www.leeds.ac.uk/downloads/)” that indicate such a large increase in contributions.

  2. November 28, 2011 1:26 PM

    You need to download the annual reports for the five years in question. We’re not going to list all of those in this blog, as it would clog up the item, but the material is there for anyone to find. There is, we understand, a broken link to the annual reports collectively (it gives a link to jadu in error), but they can be found individually with search terms.

  3. November 29, 2011 9:03 AM

    But giving the links in a reply here would facilitate futher investigation without clogging up the item.

  4. November 29, 2011 9:13 AM

    But the person manning the blog is working to rule and prioritising his students this morning. If you think we are misrepresenting facts, please write to the person named under ‘Freedom on Information’ (http://www.leeds.ac.uk/freedom-of-information) to ask to have the link to ‘what we spend and how’ restored and working, or ask them to send you the reports. Tell them the UCU is claiming the VC has had large pension contributions from the University, and you are seeking to verify the facts of the matter. They will happily comply.

  5. Another Spartacus permalink
    November 29, 2011 11:46 AM

    This reader got as far as http://www.leeds.ac.uk/downloads/download/249/corporate_publications using search terms, and found the Vice-Chancellor’s report on page 5 of the “Annual Report 2006 – 2007” (as currently linked from that page) to be quite revealing.

  6. Spartacus 2 permalink
    November 29, 2011 2:53 PM

    I searched for “annual report financial”. For example, the 08/09 report can be downloaded here: http://www.leeds.ac.uk/download/330/annual_report_2008-2009 On page 44, you’ll find the relevant numbers…

  7. November 29, 2011 3:47 PM

    Thanks for that Spartacuses. Page 5 of the 2006/07 report is illuminating indeed.

  8. An academic permalink
    November 30, 2011 8:17 PM

    Didn’t the VC claim he was taking a pay freeze during the economies exercise?

    And aren’t pensions deferred pay?

  9. November 30, 2011 8:46 PM

    Yes. And Yes.

    Mind you, credit where it’s due, if your salary gets doubled in the space of a few years, you could talk loudly about asking for a 0% pay rise for one year, bear it, and hope no-one thinks to add up the benefits. Masterful spin.

  10. simean permalink
    December 1, 2011 5:20 PM

    Isn’t this article very misleading? My recollection is that the VC was constrained in terms of the pension provision that the University could make when he first took up post as he was transferring in from the NHS scheme for the first few years so was given a salary enhancement instead (which ended at the same time your graph shows a jump in pension contributions). At no time has he received a percentage contribution which is any different from any other USS member. I am not a pension expert but I remember this was raised on the blogs at the time.

  11. December 1, 2011 5:38 PM

    Thanks for that. Not sure how any of it evidences our data being misleading, though.

  12. simean permalink
    December 1, 2011 9:00 PM

    Er, because you haven’t given all the facts. By omitting to mention that he would have been entitled to a larger contribution in the early years of his tenure, had this not be constrained by transferring in from the NHS scheme. I think the important point is surely the fact that he receives the same percentage contribution to the USS scheme as any other University employee.

    The point you should be making therefore is about his salary and whether this is excessive. How does it compare with other VC salaries for example?

  13. December 1, 2011 9:25 PM

    Well, we were talking about pension contributions, and the maths indicate that the increase in the given period was 450%. Fact. This is due to his increased salary in that time. We said so. We said how much it increased by. We also talked about issues of high pay for VCs. The article was not about comparing VCs. But if you’re asking us to do that, we can.

  14. An academic permalink
    December 1, 2011 10:41 PM

    If we can request blogs, perhaps we could request one about how the VC claimed in Senate that {…removed…}.

    The most recent USS annual report claimed that the fund had in fact made a substantial profit in the year up to March 2011 and was 98% funded at that point.

  15. December 2, 2011 9:10 AM

    Thanks for this. We’ve removed any statement by the VC as Senate etiquette has it that we do not ascribe statements to individuals. If however this information turns up in the published minutes of Senate, we’d be happy to discuss any alleged inaccuracies.

  16. An academic permalink
    December 2, 2011 2:25 PM

    UCU is correct. The first sentence of minute 11/63, which formed part of the VC’s Statement at Senate on 9 November 2011, is indeed unattributed.

    Shouldn’t someone (naming no names, as per ettiquette) tell Senate that the imposition of a sector-wide recovery plan for USS is conceivably a little wide of the mark?

  17. simean permalink
    December 2, 2011 10:08 PM

    I may be being daft, but the ‘increase in pension contribution by 450%’ cannot be the result of ‘his increased salary at the time’ if, as the public accounts state, the ‘The University’s pension contributions to the Universities Superannuation Scheme [for the VC] are paid at the same rate as for other academic staff.’ Unless you are saying his salary has gone up by 453% too.

    However, your analysis suggests a salary increase of 149% for the VC over this period. Yet In the 2004/05 accounts I found on-line the VC earned £174K (including benefits in kind) for a 11 month year. By 2009/10 this had risen to £260K (again including benefits in kind). This suggests a pay increase of c37% over the 6 year period, nothing like 149% – am I missing something?

    Isn’t the point that his original employer contributions were significantly constrained, as the early blogs suggested, and the marked increase was due to normalising this?

  18. December 3, 2011 9:49 AM

    Morning simian,

    No, you’re not being daft, but you are getting your maths muddled. Let’s clear this with the facts. In 04/05 the VCs salary, the record shows, was £174,000. In 09/10 is was £260,000. The latter is 149% of the former. These figures include benefits in kind. In the same years, the pension contribution by the University to the VC’s pension pot was £13k and £59k, the latter being 450% of the former. So we reported those accurately as facts. Now, you might wish to offer glosses on those figures, and we’ll publish them here, but as far as the cold hard cash goes, that’s what was paid by the University.

    As for your “cannot be the result of ‘his increased salary at the time’” do consider the implications of the syntax we applied: “This is on top of, and due to”, which suggests a double application of the salary increase, whereas your question implies we applied a single application. We think we’ve reported this accurately.

    By the way, all these pension contributions were paid in advance of the cut off date after which any pensionable figure will be capped at 5%. So in retirement, the VC will enjoy this part of his pension rising completely in line with CPI. Anything paid after 1 October will create a part of his pension that will rise up to 5%, but in a reduced way after that. Have you calculated how much you yourself stand to lose? Let us know – download the spreadsheet. Or would you rather not know?

  19. simean permalink
    December 4, 2011 9:38 PM

    Hmm. I only got a C in maths, but I know that if I’m on £174k and I get a 100% increase in my salary, I’m now living it up on £348k. So when you say the VC got a “149% salary increase” – yet he ends up with only £260k in his pocket – what did you mean?

    Well, I know what you meant. Suffice to say, it’s a 49% increase. And even that is wrong, since the accounts state that the salary of £170K was a ‘part year’ salary (meaning you should gross it up to a year if you’re going to compare apples with apples)..

    You made the same mistake saying the pension contributions ‘increased 453%’. I don’t know why I’m here defending the VCs figures, save that I want to see the Union fight its case on the basis of what you so elegantly refer to as ‘facts’. This is either slipshod or theatrical spin.

    As for pleading ‘syntax’ (i.e spin on the clear meaning) to weasel out of the other flaw in the original article – pull the other one!

  20. December 4, 2011 10:57 PM

    Well, it looks like this is turning into a maths lesson. Whatever it takes… But first, just to save some explanation, we assume that you don’t understand why this cartoon is funny: http://xkcd.com/985/

    So, getting a 100% increase is not the same as saying your salary is 100% of what it was (which is no increase at all). It seems it’s a matter of how you read the percentage in ‘149% salary increase’. You read it as ‘salary increased by 149%’,which would indeed be wrong, but that’s in the reading, not the writing. If the cost of a mars bar doubled, how many would talk of a 100% increase, and how many would talk of 200% cost? You say tomato…

    And so, there lies the rub. Many people have this minor confusion over what is meant by percentage increases, because in talking about percentage increases we use words to clarify a mathematic calculation that can in fact be rendered in different ways. So, if we have start salary a and end salary b, we can simply find how much bigger b is than a by the equation b/a = x%. This is what we did, and we learned that salary b was about one and a half times as big as salary a. An alternative route, which you offer here, is first b-a = z and then z/a =y%, and by this route you find out what percentage of salary a has been added to salary a to create salary b. Yes, buy this route you get an increase of 49%. Both calculations are accurate results of using different equations to offer ways of considering a against b.

    So, if anyone else is still reading… does it matter? The important figures are how big the salary is or, as we were concentrating on pension contributions, how big they are. The implicit question, which became more explicit as you read the post, was… is this level of renumeration merited? The answer to that is up to the reader.

    We stand by the syntax – you said we said something we didn’t. But let’s not turn a maths lesson into an English lesson. This is getting dull enough.

    Your point about the ‘part year’ is a good one. It doesn’t change the facts of the maths. But if you’d be happier, we can go ahead a year and state that the 2009/10 salary was 120% of the 2005/06 salary. Or, as you would prefer, it was a fifth of the original salary added to the original salary. Or as many would have it – it’s a large amount of money that may or may not be merited by performance. And that is where the important questions begin, not with the calculations of comparative value.

  21. academic permalink
    December 5, 2011 11:11 PM

    I’m thrilled. My 1% pay award next year (here’s hoping….) has, via UCU’s algebraic alchemy, just become………….a 101% salary increase!

    No doubt UCU would report it as a 101% salary increase too….

    The chutzpah in your abuse of numbers and language is quite impressive. I’m recommending you for an honorary post in the sovereign debt statistics reporting agency of peripheral Europe. After all, why let facts and meaning get in the way of a story?

    Come on UCU, you can do better than this!

  22. Anonymous permalink
    December 6, 2011 8:37 AM

    Let me try again since humour appears to be a 1-way street here.

    If I get a 1% pay award next year, will UCU be leading with complaints about a paltry

    “101% salary increase”

    ….?

  23. Anonymous permalink
    December 6, 2011 8:40 AM

    Let me try again since humour is obviously a 1-way street here.

    If I get a 1% pay award next year, will UCU be leading with complaints about a paltry

    “101% salary increase”

    ….?

  24. December 6, 2011 9:03 AM

    Given the bombardment of people wishing to get in on the semantics debate, we’ve added a parenthesised clarification in the post. Let us know if that’s enough. Or, alternatively, would Anonymous or Simean like to re-write the story – we’d happily republish it if you feel it should have been written with a different take on the figures? If we allowed mathematics to give rise to a sense we were attempting to mislead, then do offer us an alternative – genuinely, we’ll post it.

  25. An academic permalink
    December 6, 2011 9:19 PM

    While we’re on the subject of flawed mathematics, it wasn’t UCU that launched the Economies Exercise on the basis of a “£ 20 million accounting error.”

    And if it weren’t for Senate ettiquette, UCU could blog an even more astounding accounting error . . .

    But, hey, who’s counting?

  26. simean permalink
    December 8, 2011 11:02 PM

    The parenthesis steps in the right direction, however I’m afraid the maths is still wrong.

    It is a 37% salary increase over 5 years, not 49%. In 2004/05 he earned £170K for 11 months work which grosses up to £185,454 for the full year (divide by 11, multiply by 12) – or £189,454 with benefits in kind. Applying this as the FY figure for 2004/05 gives a real increase of 37% over 5 years. The same logic applies to the pension contributions. £13k for 11 months grosses up to £14.1k for the full year. This increased by 318%, not 453% to reach £59k. The accounts state that the VC receives the same pension benefit as all staff, so this pension increase logically cannot be due to the salary increase. It was presumably therefore the result of low initial employer contributions being increased to reach the same pension benefit as all staff (unless anyone can think of any other reasons….?)

    Those are the facts – not interpretations – and that is the story – although I agree there is another story about value, which you do not address here. If I’m being asked to be angry, I want to know that I’m getting angry about the facts, not spin.

  27. December 9, 2011 10:42 AM

    Thanks for the extra maths Simean. A useful addition to all the stats here, and to the theme we present in the post about value.

  28. James permalink
    December 9, 2011 2:32 PM

    This exchange has been fascinating on a number of levels. On the one hand, it seems to be a discussion between two statistical anally retentives concerning accuracy, ‘truth’ and how statistics relate to perception and narrative of argument (the original argument of ‘misrepresentation’). On another level, it comes across as a deliberate conspiracy to make sure that the figures are shouted out again and again, that we don’t miss the point that the VC earns a shed load of money. It doesn’t matter if it is the shed load of money declared by ucu, or the shed load of money Simean wants to insist upon, it’s still a shed load, and the original article asks the question in an implicit way – does he deserve it? That implicit is rendered explicit by Simean’s interventions and the playful responses he gets. And it has kept this post in the ‘most popular’ ranks at the top of the page for a couple of weeks. Valuable.

    Now, I don’t think there was a conspiracy here – Simean seems too forceful in wanting to deflect from the fact of the shed-load to concentrate on what a percentage might mean (in fact, any meaning inherent in the percentage is never really glossed upon, which renders his assaults kind of gratuitous – he wants accuracy in the application of what is at best only a relative value between two shed-load figures, hence the deflection).

    The point is clear – our university rewards its top brass at a huge level, and these people in part have been willing to participate in the wholesale re-writing of UK HE to what is increasingly looking like the detriment of future generations of students, and the detriment of its staff whose pension will end up worse than the pension that might be renegotiated for our post-92 counterparts in TPS. These people ‘lost’ 20 million in a budget a few years ago and then found it again. These people recently spent £75,000 on some paint and hay for a campaign about Energy consumption, or something, that we’ve all forgotten about. £75,000! Remember, they also declared that by now we’d be in huge debt, mostly predicted by spreadsheets that had their by far largest costs – staff wages – inflated by 3% or 4% year on year at at time when everybody sensible in economics was predicting a recession and shrinking wage increases. This generated huge potential future debts which, of course, never were going to transpire, and never did transpire. And instead we now sit on a huge amount of savings. So what will the top brass do? – they will congratulate themselves for achieving this saving by increasing their wages, when it was going to be generated more or less anyway, if the spreadsheets had factored in realistic future predictions.

    Now, the argument that VCs should be paid less is an important factor in a more broad argument about top levels of pay in both private and public sectors that we need to be having. The argument goes that if you don’t pay our VC a third of a million a year, then he might decide to up sticks and go work abroad where they will pay him that amount. Or he might head off to earn more money in the private sector (where, the tories tell us, they have much worse pension deals. Odd that). Well, it’s true that people who are used to being paid a third of a million for running a campus would be reluctant to see that reduced to something far more realistic, like say something closer to what people get paid for running countries. So of course they would look to where they can continue to fund their lifestyles. But if a limit were set at, say, a generous £150k for a VC, does that mean intelligent scholars who were invested in the future of HE could not be found to fill that position? No.

    So, it doesn’t matter how much the shed-load is that the VC or others are paid, it matters that any amount of shed-load leaks out and is not properly justified and is not properly debated. So, the UCU is indeed ‘doing better’ to get that debate at least cranked up. And who cares that the VC gets the same percentage of salary paid as pension. Of course he does – what else would we intelligently expect, but that same percentage of shed-load is a shed load compared to that percentage of a standard salary earned by people doing as many, if not more, hours and working in sophisticated ways to provide sophisticated solutions to the tasks they are given of teaching, research and administration. But that shed load pension will accrue unhindered by CPI caps – it’s in the bank now. Sorted. If it is true what I was told (and I presume such speculation does not rank as breaking any etiquette) that the VC could not even state what the CPI cap now was on our pension, and stated he didn’t fully understand the detail of pensions, and that he had faith in others to make those decisions, then that shows a flagrant disregard for the lives of the hundreds of people who work so hard and whose pensions are now so heavily shafted.

    Keep up the good work.

  29. Anonymous permalink
    December 9, 2011 4:58 PM

    What he said. That is right. This has proven to be one of those important blog posts. If the ucu had simply put up the links to the data, who would have downloaded them? But it seems a number of people have had to download them to look at the detail, and have participated in this discussion. It’s great that we have people to shine torches into these dark corners.

  30. A researcher permalink
    December 9, 2011 5:04 PM

    Instead of bickering over percentages, we should be looking at these figures, as James suggests. Remember when the UCu were accused of scaremongering when they said the economies exercise would result in 700 job losses, and then it resulted in the university shedding about 700 jobs? And their argument that the economies exercise was based on deliberately flawed data, as James reminds us. I recall a provisional financial report published on campus web a year ago that showed the University’s financial deficit forecast for 2009/10 was wrong by £19.4 million. The projected deficit of £21.2 million which was used to justify the cuts evaporated and the actual year-end deficit for 09/10 was given as £1.8 million – and that was before factoring in the 700 jobs cut, so it clearly wasn’t all that necessary. This year we see huge surpluses, but at what cost to the front-end, coal face, student experience?

  31. Peter permalink
    December 12, 2011 10:37 PM

    We should be looking at these figures. Doubtless, as James suggests, there is some dark conspiracy to maintain them in the public eye through a cunning impression of innumeracy by the blogmeister. But still, the idea that a key news channel for our community can blithely cite made-up numbers, and then patronise us with bluster and legerdemain to conceal its innumeracy, is certainly not in the spirit of academic inquiry that I signed up for. I may be biased as an ex-journo, but I think most would agree, ‘facts’ should be verified -ideally before publication…

  32. An academic permalink
    December 13, 2011 8:01 PM

    Reading these posts, one wonders what an independent audit of the university would make of how it runs its finances. A £ 20 million “accounting error” and misforecasting pay inflation should surely be good reasons to occasion independent and public scrutiny to make sure that all is in good order. After all, the university is (still) primarily funded by the taxpayer’s money.

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