Cumbria accused of ‘fire and rehire’ threat in pensions row

Staff at the University of Cumbria have accused their institution of “fire and rehire” practices, as it looks to lower its pension costs. 

In August, the university informed impacted staff that they had until 7 September to sign a new contract which would end their membership of the Local Government Pension Scheme (LGPS) and move them into a defined contribution scheme run by Scottish Widows, according to the University and College Union.

The LGPS is a pension offered to professional service staff, where the employer contribution rates vary, but are often above 20 per cent, and staff have been offered £8,000 “compensation” to move off the scheme, UCU said.

Those who do not agree to the transfer could have their existing contracts terminated, UCU claimed, and be offered new contracts on worse terms.

The news comes as universities have increasingly taken steps to lower their pension costs, with Northumbria University offering staff £12,000 to give up their Teachers’ Pension Scheme (TPS) membership, and numerous others establishing subsidiary firms to sidestep obligations to TPS.

However, most universities taking such measures have sought to move staff off the TPS, which has an employer contribution rate of 28.68 per cent currently. Few universities outside the TPS have sought to do the same.

UCU argued that staff who are currently in the LGPS should be allowed to continue in that scheme, and warned that the current row will cause reputational damage to Cumbria.

It also noted that a decline in employer contributions to the TPS, to 17.68 per cent from April, is set to save the university more than £2 million each year, according to Cumbria’s financial data. The consultation period on the proposals to change LGPS staff’s pensions began before this was announced. 

Jo Grady, UCU’s general secretary, said it was “deeply disappointing” for Cumbria to use the “outdated and discredited practice of fire and rehire to force through changes to staff pensions”.

“We have had members come to us asking why the university is seeking to make their position worse in old age. It is truly outrageous that staff should have to face the prospect of losing their existing pension arrangements simply because they refuse to accept a worse deal,” Grady said.

She said the university should “think again about the reputational consequences of unleashing the draconian threat of fire and rehire”, and said it should work with staff and unions to “rebuild the morale which has taken a big hit through the actions that the university has taken during this whole process”.

The University of Cumbria has been approached for comment.

juliette.rowsell@timeshighereducation.com