Leader: Who will pay to restore health of staff pensions?

July 25, 2003

The precarious finances of Britain's universities remain uncontestable - deficits loom and it will be a long time before the first fruits of top-up fees filter through to depleted coffers. But this week's warning that the pensions debacles of the private sector could spread to some university schemes adds a worrying dimension.

The Universities Superannuation Scheme is in surplus - if not so healthy as it was before the markets plunged. And the parallel Teachers' Pension Scheme for new universities is in effect underwritten by the Treasury. So, say the analysts, academics' pensions are as safe as it is possible to predict in these uncertain times.

But, for non-teaching staff in the traditional and new universities, the prospects are not so healthy, according to ratings agency Standard & Poor's.

If they have the resources, universities can ease any crisis by increasing their contributions to restore surpluses. Otherwise, the options inevitably include higher employee contributions, or even attempts to reduce benefits.

But support staff will sense discrimination in their conditions of employment if there is even the possibility that they are exposed to the risks of underfunding while their academic colleagues are largely insulated.

Who now remembers the Bett report recommendation that pensions inequities needed to be tackled? And, of course, increased money for non-academic staff pension schemes means less for other, mainstream, academic activities.

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