More strike action over USS pension cuts ‘odds-on’

UCU negotiator says UUK’s latest proposals are unlikely to win support

April 13, 2021
Source: Eleanor Bentall

UK higher education is “odds-on” for further industrial action over pensions, experts have said.

This comes after Universities UK (UUK) proposed making pensions less generous to forestall “unaffordable” increases in contributions to the Universities Superannuation Scheme (USS).

The proposals are aimed at preventing combined contributions from employers and staff rising from 30.7 per cent of salaries to between 42.1 per cent and 56.2 per cent in order to protect current benefits, as was set out in the most recent USS valuation.

Both UUK and unions have said this would be unaffordable for institutions and for staff, but a request by employers for a review of the valuation was rejected.

The UUK proposals include changing the accrual rate – the proportion of earnings received as a pension for each year in the scheme – to 1/85th of salary, instead of 1/75th of salary, and reducing the threshold for the defined benefit cut-off – which offers a guaranteed amount of pension – to £40,000.

However, the University and College Union (UCU) said these amounted to “unnecessary and damaging cuts” when the universities supporting the USS “could afford to take a more progressive approach”.

The union warned that its members were likely to vote for more industrial action if employers failed to make radical improvements to UUK’s initial proposals.

Sam Marsh, senior vice-president of the University of Sheffield’s UCU branch and a UCU national negotiator for the USS, said “what has been proposed by Universities UK is a non-solution to the ongoing crisis at the USS”.

“Vice-chancellors will be aware that this proposal will be odds-on to provoke industrial action. Perhaps worse, they will know that it would be unlikely to stand the test of time, just as has been the case with previous attempts at benefit reform,” he said.

The 2020 valuation was “the culmination of a misguided approach to scheme management that brings only a spiral of decline, unaffordable contribution increases and industrial strife”.

“There is a well-known crisis in governance at USS…It is time for [employers] to call it out, take steps to address it and find a long-term solution to the scheme,” he said.

Roger Seifert, emeritus professor of human resource management and industrial relations at the University of Wolverhampton Business School, agreed that industrial action was on the cards. Both sides will become “entrenched”, as employers face financial uncertainty in the wake of student number fragilities and concern over research funding post-Brexit, while staff are “more worried than ever about their futures in terms of secure, long-term employment, workload, promotion pathways and research opportunities”.

“Any way forward would require the employers to be more united and clearer as to the medium-term future of the sector,” he said.

A spokesperson for UUK said: “It is easy to simply oppose change, but reform is necessary to tackle the scheme’s funding gap and ensure that USS pensions are affordable for members and employers. We would welcome and be keen to examine alternative proposals from the UCU.”


Print headline: More UK strike action over pensions ‘odds-on’

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Reader's comments (3)

What a mess. What happened to USS? I'd be interested to know if there are any hint of financial impropriety in the past and whether academics are dropping out of the pension scheme now, given that it seems basically unviable and they can't really plan their future pension income? Another reason to get out of UK academia, as if more were needed....
Yes, very depressing. I do think that some younger staff are opting out of USS and some senior staff taking out the defined contribution part. I would never have believed when I took my first academic job that we would reach this position. It was just about possible to live with pay rises that did not keep up with inflation because of the increments and the prospect of a good pension. Slowly, the benefits of academic life have been eroded to the point that it is not attractive to the majority of home students as a career. I do not blame them, the pandemic prompted me to reduce my hours and take some USS benefits - the maximum lump sum is good for investments. I fail to understand how USS can be so badly run because I can follow the best traders on the eToro share platform and make gains of at least several percent per annum. Somehow, USS has managed to turn its surplus some years ago into a deficit.
The sheer incompetence of USS beggars belief: the leadership needs to be held to account for the atrocious state of the pension fund. I don't suspect inpropriety or fraud on their part, they just appear to have made a complete mess of things.... yet still give themselves huge salaries & bonuses, & probably have made sure THEY have decent pensions. I'm a late entrant to academia, but one of the attractions was that in my mid-50s when I slithered into a university was that the pension scheme was decent. However the 'contract' with them does not appear to be worth the paper it's written on & I am not best pleased. They need to be held to account, perhaps replaced by someone competent at fund management... and who is prepared to honour their commitments.