An independent review of the valuation of the pension scheme at the heart of industrial action in the UK must “enjoy the confidence of the sector or be doomed”, a union leader said.
Universities UK announced on 18 March that it was appointing a panel to examine the methodology and assumptions that lay behind the estimation that the Universities Superannuation Scheme was facing a £6.1 billion deficit.
It was this calculation that led to UUK proposing the end of the element of the USS that guarantees scheme members a set level of income in retirement, a proposal that led to members of the University and College Union at 65 institutions taking strike action.
UUK said that the panel would have an independent chair and be made up for academics and pension professionals. UCU would be invited to provide evidence, it said.
Alistair Jarvis, UUK’s chief executive, acknowledged that some academics had questioned “whether there is, in fact, a very large deficit”.
“This panel of independent experts will consider issues of methodology, assumptions and monitoring, aiming to create more transparency and understanding of how the scheme is valued,” Mr Jarvis said. “I hope it will give assurance that the valuation undertaken by USS has been robust, and boost public confidence in the process.”
Mr Jarvis said that the need for action was urgent, since the Pensions Regulator had imposed a deadline of 30 June for changes to the USS. “We have proposed changes only because they are necessary,” he added.
But Sally Hunt, UCU’s general secretary, said that USS members needed action, not a review.
“UCU will, of course, look at any proposals UUK makes but our members have made it quite clear that what is needed is a much improved offer,” she said. “Any review would need to enjoy the confidence of the sector or be doomed.
“UUK really need to work much harder to win the trust of university staff. We remain available for talks, but what is really needed is a much improved offer which retains a decent, guaranteed pension income in retirement, and addresses our concerns about the valuation of the fund.”
Dates for further strike action, expected to coincide with universities’ assessment and exam periods, are set to be announced this week. UCU claims that UUK’s proposals would leave the typical lecturer £10,000 worse off annually in retirement.
Mr Jarvis said: “Both sides must work urgently to avoid the dispute impacting on the exam period. In the interests of our students, I hope we can now reach a speedy resolution. Students are caught in the middle of this dispute through no fault of their own.”