UUK criticises ‘excessive prudence’ behind pension reforms

The USS is being attacked from all sides over the methodology of its valuation and assumptions, claims UCU

December 11, 2014

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.”

chris.havergal@tesglobal.com

Times Higher Education free 30-day trial

You've reached your article limit

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments

Most Commented

Laurel and Hardy sawing a plank of wood

Working with other academics can be tricky so follow some key rules, say Kevin O'Gorman and Robert MacIntosh

Lady Margaret Hall, Oxford will host a homeopathy conference next month

Charity says Lady Margaret Hall, Oxford is ‘naive’ to hire out its premises for event

women leapfrog. Vintage

Robert MacIntosh and Kevin O’Gorman offer advice on climbing the career ladder

Woman pulling blind down over an eye
Liz Morrish reflects on why she chose to tackle the failings of the neoliberal academy from the outside
White cliffs of Dover

From Australia to Singapore, David Matthews and John Elmes weigh the pros and cons of likely destinations