Vice-chancellors ‘prepared to rethink’ USS pension reforms

Universities UK concedes that it might ‘have not considered every possible angle’, as strike action continues

February 23, 2018
UCU pension strike
Source: PA

Universities UK has said that it is prepared to rethink its proposed reforms of the Universities Superannuation Scheme if the pension fund can be put on a sustainable footing.

Strike action over changes to the scheme, which unions say could cost the typical lecturer £10,000 a year in retirement, entered a second day on 23 February and was due to resume on 26 February, but pressure to reach a settlement is growing.

As staff at 65 universities walked out, more vice-chancellors called for fresh negotiations, with Chris Day, vice-chancellor of Newcastle University, saying that he “absolutely support[ed]” the strike.

In an open letter, Universities UK, which represents vice-chancellors, indicates that it is willing to shift its position, stating that “we have been and continue to ask for further talks with [the University and College Union] on the future of the scheme”.

A two-month consultation would begin at the end of March, say Janet Beer, the vice-chancellor of the University of Liverpool and the UUK president, and Alistair Jarvis, UUK’s chief executive.

“We would like to appeal to you to take the opportunity to put forward any proposals you feel may not have been sufficiently considered,” the letter says. “We have sought independent expert advice at each stage of this process, but we are open to the possibility that we have not considered every possible angle.”

Union members’ key concern is the proposal to end the defined-benefit element of the USS, which guarantees members a certain level of pension income in retirement. Under UUK’s proposals for a fully “defined contribution” model, returns for members would be dependent on the performance of the scheme on the stock market.

UUK says that it is “open to changing the scheme again to reintroduce defined benefits if economic and funding conditions improve”.

Other options, the letter says, could include “exploring alternative models for risk sharing”, for example, a “collective defined contribution” model, which is not currently possible under UK legislation but may be in future. UUK says that it is also willing to discuss exploring “how deficit recovery contributions can be kept as low as possible”, and options to reduce the risk of USS investments.

The letter warns that the USS faces a £6.1 billion deficit and that universities cannot afford to increase their contributions to the scheme any further.

In response, the UCU accused UUK of “spin and subterfuge”, adding that the association had given “no indication” over whether it was prepared to negotiate with members on their terms.

“Universities UK needs to stop sending out mixed messages on whether it wants to talk or not,” said Sally Hunt, UCU’s general secretary. “If they want to talk to us without preconditions, as the universities minister has suggested, then let’s do it today.

“The sector is suffering from a serious image problem at the moment and staff and students deserve much better from their leaders than spin and subterfuge.”

Three days of strike action were due to get under way on 26 February, with walkouts of four and five days in subsequent weeks.

rachael.pells@timeshighereducation.com

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Reader's comments (2)

'UUK says that it is “open to changing the scheme again to reintroduce defined benefits if economic and funding conditions improve”.' - which is already part of their proposal. 'The letter warns that the USS faces a £6.1 billion deficit and that universities cannot afford to increase their contributions to the scheme any further.' - which is also simply restating their current position. In other words, UUK appear to be willing to talk without considering any change to their current position. That doesn't sound like meaningful talks to me.
If UUK want to be taken seriously they need to stop repeating this £6.1 billion deficit nonsense. The pension fund is doing fine (£60 billion and growing with payments significantly lower than contributions). The way to force it into a deficit is if all of the contributing universities went bankrupt at once, at which point we have bigger problems. UUK just wants to offload all their risk onto employees so that they can borrow more money.

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