USS strike: we need an honest debate about pension ‘facts’

Pension cuts have been presented as a matter-of-fact and inevitable response to an enormous deficit, but this position has started to unravel, says Jan Machielsen

March 8, 2018
Axe left in wood
Source: iStock

“There can be no debate with someone who denies the principles.”

My colleagues in philosophy will be better placed to discuss the origins of this age-old maxim – known in Latin as “Contra principia negantem non est disputandum” – but the basic idea is clear enough: one cannot have a discussion without a shared premise. There is no disputing the facts.

The maxim has come to mind with ever-increasing regularity – and clarity – from the moment news of the mooted university pension reforms broke, like the nightmare or vision at the beginning of a horror film, whose truth is gradually revealed.

My colleagues and I in the higher education sector have been bombarded with facts over the past few months.

My own vice-chancellor at Cardiff University first raised the spectre of pension reform in an all-staff email in November, an email that explained that the Universities Superannuation Scheme was a defined benefit scheme and that its trustee has to ensure that universities could afford their liabilities under rules laid down by the Pensions Regulator.

Some facts are better than others, and none are better than actual numbers. In a subsequent all-staff email in January, our vice-chancellor reported that the pension scheme was in deficit by about £7 billion, and employer contributions would have to rise by 4 per cent, costing Cardiff more than £10 million annually. 

Facts are facts. These ones are, of course, regrettable. “It is understandable that members of the scheme feel strongly about this issue,” read the email. “The strength of feeling amongst USS members is palpable and understandable, and nobody would want to be in the position we find ourselves,” it added. So who can disagree with facts? Do they not represent a fait accompli?

This has been the position of almost all vice-chancellors: combining facts with profound expressions of regret.

Vice-chancellors were wellsprings of understanding and compassion. We really wish it wasn’t so, but the facts leave us no choice. Staff have every right to feel emotional, but we need to be reasonable and eventually we will have to move on.

The origins of this strategy can be debated. (I am a historian, but of the 16th century – I don’t think roots go back quite that far.) Certainly, it was successful for a time. Not only did it foreclose the possibility of debate – facts are facts – it made any response seem overtly emotional, an unwillingness to see reason.   

Yet, facts are never just facts, and numbers even less so. Facts, we teach first-year history undergraduates, are made. Facts are nothing without interpretation. It is historians that identify turning points, they are not there waiting to be found. As E.H. Carr noted in 1961, in a chapter entitled “The Historian and His [sic] Facts”, “those historians who today pretend to dispense with a philosophy of history are merely trying, vainly and self-consciously, like members of a nudist colony, to recreate the Garden of Eden in their garden suburb.” (Carr was a Marxist, as students are always surprised to learn, but his point about facts and their interpretation still stands.)

In this pension dispute, staff were presented with the polished end product of a protracted process of interpretation and – dare I say it – manipulation, intended to occlude the possibility of debate.

This process intended to hide from view legitimate areas of discussion. Forecasts based on assumptions (some of them highly dubious, which involved the bankruptcy of the higher education sector) were transformed into cold, hard facts, whose veracity only the most hot-blooded would refuse to accept.

This gambit which once looked so successful has run into trouble. Even if employers still prevail (and I hope not), their leaders are weakened. Their strategy has been exposed and can never again be resurrected. Their facts have become factoids. You are in trouble when your pension calculations are challenged by the Financial Times.

The desperation with which vice-chancellors have clung to their reasonableness has also become apparent. Oxford’s vice-chancellor expressed her understanding for “the depth of feeling on [the pension] issue but I have to say that I have been disheartened these past few days by the tenor of some of the debate”, but then endorsed a strategy that frustrated debate in the university’s main decision-making body. She, too, has now changed course.

Reasonableness such as this is the embodiment of passive-aggressive behaviour. It can be diagnosed and pointed out, but those who engage in it are impossible to dislodge from their stance.

Yet, at least, passive-aggressive behaviour is almost necessarily time-limited.

Vice-chancellors are finding that, stripped of their facts, the mask of “I-am-sorry-you-feel-so-strongly” can hold only for so long.

Let’s hope that they will soon abandon this posture altogether. Employees have been waiting for an honest debate for far too long already.

 Jan Machielsen is a lecturer in early modern history at Cardiff University.

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Reader's comments (5)

This is just superb. My tip for year's most read pieces.
I believe that it is fairly clear that USS does have a current funding deficit - the amount of the deficit is certainly debatable - but it exists based on the regulations currently applying. There has also been a deficit for some considerable time - the estimated deficit at the annual valuation update of 31 March 2016 (i.e. before the much argued about “manipulation” of assumptions in 2017 took place) was reported by USS's actuary as £10billionup from £5.3billion in 2014 at the last valuation. Most independent commentators agree and concerns have been raised by Frank Field and the Pensions Regulator about USS addressing the deficit and de-risking the scheme. Unfortunately all schemes’ Actuarial Valuations do have to look at a “snapshot” on the specific date of the valuation (the “University sector goes bankrupt on the same date” date.) That is in fact the single unavoidable point that is not open to debate and is not an invention, choice or manipulation by USS trustees or the sponsoring employers. An assessment is made to check whether the assets in the scheme on that date, allowing for future investment, are sufficient to pay the estimated future liabilities built up at the valuation date. There are a plethora of choices on a multiplicity of assumptions and any number of outcomes all of which will in any event be wrong! Actuaries can and do debate them endlessly. There is however a statutory requirement for the scheme’s trustees to be “prudent”. From my understanding of what I’ve read, the USS trustees proposed “relaxing” some of the assumptions/de-risking plans from those used in 2014. This would have had the effect of reducing the reported deficit as has been endlessly pointed out. When they consulted, as they are required to do, with UUK (representing the employers) UUK raised some concerns and asked some questions about this and the Trustees decided not to go ahead with the changes. I was until very recently a pension administrator at a University (and a firm supporter of DB schemes). I however must confess to being somewhat surprised that UUK and the employers have been so vilified for not wanting the assumptions from the scheme relaxed. You would usually expect that reaction to them supporting such a "relaxation". The Pension Regulator would certainly have required the trustees to justify what they had done (if these proposals had been accepted) – What reaction one wonders to headlines then of “University employers conspire with USS trustees to hide increased USS deficit”? Beyond all that, a simple common sense look at USS, outside the regulatory framework of actuarial valuations, would indicate that there is plenty of money currently, no immediate problem and of course all the employers are not going to go bankrupt on that valuation date. However, none of that is relevant to the actuarial valuation calculation - common sense is not a factor that can be factored in! Where a multi employer scheme like USS can benefit (where it is considered that the employers are strong) is the length of time for the Recovery plan to address the deficit. USS had a 15 year recovery plan in 2014, when I believe 10 years was more normal at the time. The situation would be worse otherwise. Let us also not forget that USS is somewhat unique amongst schemes in that benefit changes are not dictated by the employer. There is equal representation on the committee deciding on benefit changes - "In the USS structure, the Joint Negotiating Committee – made up of an equal split of member (UCU) and employer (UUK) representatives, with an independent, committee-appointed Chair has the task of deciding how future benefits and cost-sharing arrangements between members and employers need to respond to the funding position at each valuation." So this JNC would have approved the current proposed benefit changes (presumably independent chair plus UUK reps outvoting UCU reps in this particular instance, but this set up allows for it to have happened equally the other way - UCU + chair outvoting UUK). Apologies for the long post and thanks to anyone who has read this far.
Dear Elaine, Forgive the response. It might be bad form for an author to reply -- I don't know, this is my first THE blog post -- so I won't comment any further beyond this single message. I do, however, want to thank you for your contribution and for offering facts that could be the subject of actual discussion. I am not sure which of these I would accept. A colleague in mathematics tells me that the valuation made a number of dubious assumptions: about continuously increasing life expectancy, about above-inflation wage increases, and -- as I already mentioned in passing above -- about widespread bankruptcy in the Higher Education sector. It has not been my intention in this debate to cast judgement on any of these facts. Instead, what I tried to offer in my post is a humanities perspective, and do what we working in humanities subjects do best: examining the framework of the debate, identifying argumentative strategies, pointing out rhetorical tropes. All of these may give me and my colleagues reason to feel suspicious, as I tried to make clear. You are absolutely right, though, surveying the terms of the debate does not alter the "facts" in themselves. What such a survey does show is that the facts are the tip of an iceberg, that they are created, and that we can and should debate them, rather than be forced to accept them because the opposite is unreasonable. Your contribution could be a beginning of a debate, not the end. If anything, then, what makes your contribution so valuable to me is that, unlike the announcements from vice-chancellors, it doesn't foreclose debate but invites further discussion (which should certainly involve my colleagues in statistics, mathematics, economics, and the like). So thank you for taking the time to write such a considered response. I hope there will be more debates and responses like this across the Higher Education sector. Yours, Jan
In a meeting with staff at QMUL yesterday the Principal admitted that the risks that have led the pensions regulator to object to the USS valuation are significantly driven by political decisions: decisions about the level of fees that universities are allowed to charge, decisions about competition in the sector and the consequences of universities failing. Effectively the government have withdrawn guarantees for universities that were once there while increasing pressures on the management of these same institutions. University managers are also competing with each other to attract students and staff by improving facilities, in some cases making daft investment decisions but also creating badly needed new facilities. The most significant variable that management have real control over are staff costs. So every time a political decision is taken that increases the costs of running a university managers will return to staff costs - pensions, proportion of casual workers etc. Improvements in the universities' balance sheets tend to benefit those who are coming in or who can threaten to leave. Meanwhile government stand back and ask everyone to be sensible. One way out of this mess: if the government are going to increase risk, they have to contribute to its mitigation. UCU should start to target the government as well as those VC's who are upholding UUK's damaging solution to the pension regulator's objections.
Dear Jan Thank you for taking the time to respond to my earlier post. I absolutely agree that honest debate is required. This needs to be informed and accurate. Like you I have no idea of the protocol on further posts. I have provided links below to more information (probably too much information) which may be of interest for those looking for more information. Regards Elaine USS’s website has a considerable amount of information on their valuation results, responsibilities and independence of USS trustees, the USS decision making process and JNC negotiations. These pages may be of interest as starting point: They also provide notice of the default changes to the scheme which would have been applied, in accordance with the Scheme’s Rules, if the JNC had not agreed proposals. This notice was given by USS after the JNC had failed to meet two deadlines to agree proposals. For the really interested, the Pensions Regulator’s guidance for Scheme Trustees on carrying out actuarial valuation can be found here: It is perhaps worthwhile reproducing the specific advice to trustees about choosing assumptions: “You are responsible for choosing prudently the assumptions that will be used for calculating the technical provisions. This includes taking account of the degree to which the employer can support a range of likely adverse outcomes. You must take advice from the scheme actuary on making relevant assumptions. Your assumptions should be evidence-based. Ensure you discuss with the actuary how sensitive the technical provisions are to changes in the value of assumptions. The more sensitive technical provisions are to changes in an assumption, the more important it is you choose an appropriately prudent value for that assumption.”

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