Does the introduction of a defined contribution pension scheme signal a new era for reward in higher education?
Higher education professionals have been faced with a huge moral dilemma this week (at least those of us who bother to participate in the collective bargaining process through membership of the University and College Union). Should we cast a “yes” vote, recommended to us as the best that can be achieved through negotiation, for a new deal on pensions that will in effect mean that the concept of defined contribution is accepted in our reward culture? Or should we vote “no” to defend the principle that we are not really in it for the money but potentially expose ourselves to the pain of further industrial action with inevitable consequences for the smooth running of university life and our shortening arms in deepening pockets?
We are told that the defined contribution pay threshold of £55,000 a year will mean that 75 per cent of staff will not be affected by the defined contribution element. But is this not the thin end of a wedge? Salary inflation and further pressure to lower the threshold could see a rapid increase in the numbers affected. Also, is this biting the hand that feeds us? We need good terms to attract high-calibre staff for the long-term health of the sector, but what sort of message does it send out if we offer poorer benefits at the higher end of the salary scale?
So what next for the evolution of the university reward scheme? Perhaps an annual bonus, profit share or share options? Only time will tell whether future generations will be motivated by the love of the job or whether our reward schemes can compare favourably with what Goldman Sachs can offer.
Parbold, West Lancashire