Reform USS or lose government cash, EPF says

July 1, 2010

Employers have claimed that the government will cut higher education's funding grant unless payments into the sector's largest pension scheme are reduced, as they stepped up their public relations campaign to win support for reform.

The Employers Pensions Forum (EPF), a group of vice-chancellors and senior managers, held a press briefing on the Universities Superannuation Scheme (USS) in London on 28 June. It hired an external PR company to organise the event, titled "Does USS have a future?".

The EPF and the University and College Union have put forward rival plans for reform of the £30 billion USS, one of which could be pushed through at a crucial 7 July meeting.

Employers have proposed closing final-salary pensions to new entrants and putting them on a career-average scheme. The UCU has argued for retaining the final-salary element but increasing member contributions. Sir Andrew Cubie, the independent chair of the scheme's Joint Negotiating Committee, could use his casting vote to decide between the proposals - or could refuse to do so and leave the status quo in place.

At the briefing, Tony Bruce, an adviser to the EPF, said that failure to reform would bring external pressure. "The government is not likely to stand by and allow an unreasonable situation like this to continue for ever."

Mr Bruce argued that the government would not want any extra funding arising from Lord Browne's review of tuition fees to support the sector's pension schemes.

Damian Docherty, another adviser to the EPF, said that a portion of the grant allocated via the funding councils - which currently amounts to £7.3 billion in England - could be "withheld" if the status quo remained in place.

The UCU has said that it will ballot for industrial action if changes to the USS are forced through against its wishes.

The union's status as the sole representative of USS members in negotiations is also under fire from employers.

Peter Thompson, an independent actuary advising the EPF, said it was a "historical anomaly" that the UCU, which set up the scheme in 1974, has a "monopoly" on representing members, despite only a "minority" being in the union.

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