Universities UK has criticised the “excessive prudence” that, in its view, underlies planned pension reforms at pre-92 institutions.
The University and College Union claimed that the call from the employers’ organisation for a rethink demonstrated that the planned changes to the Universities Superannuation Scheme were now being “attacked from all sides”.
The end of the final salary scheme was proposed in a bid to fill an estimated £13 billion deficit and, while this is also now accepted by the union, UUK has argued that reconsideration of the technical provisions and recovery plan is needed to avoid “potential detriment” to its members and their staff.
In a consultation response to the USS, UUK says that the pension scheme should have a recovery period of 20 years, arguing that the proposed period of 15 years is overly cautious.
The response calls for a “more realistic” projection of salary rises to be used in the valuation results, stating that about a quarter of the 54 employers who took part in the consultation process suggested that the existing proposal was too high.
It also reveals that approximately a quarter of institutions did not support the “gilts plus” methodology used to estimate extra returns expected from the scheme’s assets.
“We do have significant concerns about the overall level of prudence that is being assumed in the valuation process,” the response says. “Failure to address this concern of excessive prudence has caused a number of institutions to challenge the underlying methodology and rationale for the assumptions adopted.”
At a USS trustees’ meeting on 4 December, the UCU delivered a petition with more than 16,000 signatures calling for a fair method of valuation to be adopted.
Michael MacNeil, the UCU’s head of negotiating, said: “The USS is being attacked from all sides over the methodology of its valuation and assumptions.
“We have said from the beginning that its excessively prudent approach forced unnecessarily radical proposals being put forward to alter the scheme.”