Universities across the UK are making every effort to minimise
the disruption to students from planned strike action by some
University and College Union (UCU) members at 64 universities
over pensions reform.
Industrial action comes despite Universities UK (UUK),
representing 350 higher education employers on Universities
Superannuation Scheme (USS) reform, continuing talks with UCU.
USS, like many schemes, has been affected by difficult economic
conditions. The cost of future pensions has risen by one-third in
the last three years, and the scheme has a deficit of £6.1
billion, which by law must be reduced.
Without reform, employers and staff would be forced to increase
pension contributions to unmanageable levels – an extra £1
billion every year. Employers would have to cut other spending on
teaching, research, student support and make redundancies to cut
costs, so more money could be diverted to address rising pension
costs.
Although UCU has achieved a mandate for industrial action in 64
(61 initially) out of the 68 institutions balloted, the number of
UCU members voting in favour of strike action represents an
estimate of only 16% of academic staff in those
institutions, and 12% of active USS members in higher
education.
A spokesperson for Universities
UK said: “The changes proposed will make USS
secure, and sustainable, safeguarding the future of universities.
University staff will still have a valuable pension scheme, with
employer contributions of 18% of salary - double the
private sector average. This makes strike action very
disappointing. UUK remains at the negotiating table, but so
far UCU has refused to engage on how best to address the funding
challenges facing USS."
Key facts:
- Universities
UK has met UCU over 35 times in the last year to discuss USS
reform. Following an intervention from the Pensions Regulator,
and a strict legal deadline (30 June), both parties agreed a
deadline to agree reform proposals to make the scheme
sustainable. This deadline was extended twice.
- The Joint Negotiating Committee (JNC) – the formal and
legally established forum for deciding changes to USS which
includes joint membership by UCU and Universities UK – reached a
decision on proposed benefit reforms in January. It recommended
the employers’ proposed changes to make the scheme secure and
sustainable and ensure that staff pensions remain attractive,
with the independent chair casting a decisive vote.
- A number of misleading claims are being made about
Universities UK’s proposal, which are addressed in
this Five Key Questions
document. For example, UCU claims members will lose
up to £200,000 in retirement. However, UCU’s figure is
for someone earning over £100,000 in today’s terms and without
any indication of the assumed level of investment return, which
is probably the most important assumption in any calculations.
It is true to say that benefits built up in the future will be
lower. UUK commissioned its own modelling from its advisor Aon,
and this work suggests that under the proposals, and including
standard state pension entitlements, current members should
continue to receive retirement incomes equivalent to 80–90% of
those that would, hypothetically, have been received under the
current benefits.
- Pension benefits already built up are protected by law and
cannot be changed retrospectively.
ENDS
Notes
- USS is one of the largest private pension schemes in the UK
and is the principal scheme for academic and comparable staff in
UK universities and other higher education and research
institutions. Universities UK is representing the views of
more than 350 higher education employers on USS reform proposals.
- USS is governed by a clear set of scheme rules. Any changes
to these rules need to be decided on through the JNC. The JNC
brings together an equal number of representatives from
Universities UK and the University and College Union. The JNC has
an independent chair who oversees discussions between employer
and member representatives, and can choose to cast a deciding
vote if agreement between both parties cannot be reached.
