I am writing with an update on the USS pension situation. This will be fairly long so, if you don’t want to read it now, please bear in mind that we periodically update the branch blog with these updates, as well as various bits of news that do not go out through UCU-announce.
Recent USS Activity
On 22nd January, UCU released an alternative proposal for our pensions to that the UUK had previously tabled. The proposals, which the USS Trustees verified as costed and implementable (and here), were as follows:
- That UUK call on USS to issue a moderately prudent, evidence-based valuation of the financial health of the scheme as at 31 March 2022, to be issued for consultation in June (at the latest);
- That employers agree to provide the same level of covenant support as for their own proposals to facilitate a cost-sharing of current benefits throughout the 2022/23 scheme year, starting 1 April 2022 at 11% member/23.7% employer until 1 October 2022, and 11.8%/25.2% thereafter;
- That employers agree to pay a maximum 25.2% and members a maximum of 9.8% from 1 April 2023 so as to secure current benefits or, if not possible, the best achievable as a result of the call on USS to issue a moderately prudent, evidence-based valuation.
Mike Otsuka, a UCU USS negotiator, wrote a blog post that outlines the logic behind these proposals. In short, Otsuka recognises members’ preference for keeping USS benefits even at the cost of a modest increase to contributions in line with the current valuation.
On 9th January, I wrote a letter to Martin Atkinson (UCU Letter re. USS 9.2.22) encouraging the EG to support the UCU proposals. I acknowledged that he and Karen Cox would like to see a change of Trustees before a new valuation is carried out and that we agree that a change of the Trustee’s makeup is needed as a matter of urgency. Nevertheless, I argued that we had no more time to wait before the UUK’s damaging proposals would be implemented – University management’s imminent support for the UCU’s proposals was crucial.
Nevertheless, EG refused to support the UCU’s position and voted in favour of UUK’s damaging and needless cuts (Proposed Consultation Response – UCU proposal feb22-1). The letter contains four justifications for rejecting the UCU position, none of which should be accepted:
1. ‘any further increases to the UUK modified proposal contribution rate of 21.6%, even to a capped rate of 25.2%, would require staff cost reductions to be made elsewhere. We strongly fear that this could impact on jobs and our ability to make pay awards, thus adversely impacting staff workload, staff morale and the student experience.’
As if staff workload, staff moral and the student experience are not already being effected by the calamitous financial situation that EG have allowed to perpetuate at the University, management clearly do not appreciate that a ~35% decrease in our pensions might in itself lead to further ‘adverse impact’. UCU negotiators have already identified that the University made £4 million in advanced savings that were given directly to our creditors. Perhaps, if EG were seriously concerned about workload, morale and the student experience, it might have put this money into a pot to pay the increased contributions that the UCU proposals would have required until the next valuation.
2. ‘such contribution increases for members would be both unpalatable and, in some cases, simply unaffordable – this is therefore likely to lead to an increased opt out / withdrawal from the scheme’
The survey EG conducted before responding to the UUK consultation confirmed that there were more staff who were prepared to take the increased burden of contributions in order to maintain their pensions than not.
3. ‘In the event that either a March 2022 valuation could not be conducted in time or that this concluded a worse or less positive outcome than is currently assumed within this proposal, the further increases in contributions that could apply would be even more damaging’.
This is a reasonable objection only whilst University managements refuse to support UCU’s proposals. UCU has, however, been pushing for a revised valuation against UUK who are the body holding things up. Furthermore, the separate legal challenges being mounted by both UCU and two of its members would ensure that a reasonably prudent position is adopted by the USS Trustees, ending the farcically pessimistic cycle of valuations. I have written before on this blog about prudence in USS, often using Neil Davies’ work as a guide. Sam Marsh has also written on how the USS is actually, in fact, much more healthy than its Trustees, or The Pensions Regulator (TPR), let on.
4. ‘we point to the USS Trustee response to a previous request for a March 2021 valuation, which concluded that the funding position would have worsened due to the Pensions Regulator steer for less-prudent assumptions to be used at this date’.
Neil, above, shows how TPR has likely overstepped its statutory boundaries in pushing for an overly-prudent 2020 valuation and the extent to which this has happened is in the scope of Neil and Ewan’s legal challenge against USS. As I have repeatedly made clear at the USS sub-JSNCCs however, the pension pot is in a far more healthy situation than the USS Trustees have historically admitted. For example, as they recently stated in answer to their member questions, ‘since 31 March 2020 the value of the scheme’s assets has recovered to pre-pandemic levels and, as at February 2022, stood at £88.8bn’:
Whilst the health of the pension pot also takes into account liabilities in relation to asset growth, USS has not yet given evidence of the growth of liabilities in relation to assets. There is no evidence to suggest that liabilities have grown to anywhere near enough the levels that might require such high levels of prudence.
You will no doubt by now have read that the UUK’s proposals were voted through at the last JNC and that our pensions will become significantly worse off from 1st April. You can find out how much they will change here. Atkinson’s email (subject: [uss-consultation] Final outcome of the USS 2020 Valuation) is frustrating in its unequivocal support for UUK’s position and suggests that what members might have been subject to (i.e. the increased backstop costs (i.e. increases to 11% in April) were inevitable. They were not, and we should be clear:
The reason why our future pension accrual will be 65% of what it is now is because of political cowardice and financial mismanagement of British Universities at both the national and local levels. Whilst Vice Chancellors around the country scrabble for the chicken feed dropped by the OfS, hopelessly complicit in the neoliberalisation of HE, they have entirely failed to ensure the short- and long-term financial stability of the institutions that they are paid £hundreds of thousands to watch over. Any justification that we must take a ~35% cut to our future remuneration is predicated on their lack of resistance to the Tory’s financialised image of HE.
Where have been the voices of resistance whilst Universities have been gutted by attempts to turn students into consumers? Where has been the commitment to staff wellbeing and remuneration from the managers who often earn 10x the salary of other University workers? Kent management’s decision to support the UUK proposal is just another example of their generalised political cowardice and Cox must account for her silence.
Whatever disagreements we may have with how industrial action and its campaign has been carried out, or over the specific details of the UCU proposals, we must remember that it is they who have catastrophically failed in their responsibilities to guarantee the enduring success of British HE. Given this failure, it is clearly up to us to do so, and so we must galvanise our commitment to the sector we all love. There is still much to fight for: the next valuation round and the Four Fights campaign are very much still live, as is our local dispute to save jobs here at Kent.
Legal Action & What You Can Do
- On 28th February, Neil Davies’s (Bristol UCU) and Ewan McGaughey’s (KCL UCU) legal action passed its first hearing at the High Court and will get an urgent new hearing on the 28th March.
- There are four claims:
- That the 2020 valuation was flawed and unnecessary
- USS costs are excessive
- The changes discriminate against women, younger and minority colleagues
- The USS has failed to have a credible plan to divest from fossil fuels, and this causes significant financial detriment
- This is a crowdfunded effort and they rely upon donations from members and branches. I will put forward a motion at the next branch meeting for the branch to make a donation to the fund, however every individual donation will help.
- Please follow the above link to see how they are suing the USS Trustees in order to reverse the damaging cuts.
- Please consider donating what you can.
- There are four claims:
- Please continue to participate in our local boycott of marking and assessment to save jobs. It is vital that we continue to pressure management and show them how furious we are at their attempts to make their failures our losses.
- Please return your ballot and then let us know (so we don’t pester you about it!)
- A further five consecutive days of strike action have been called starting on Monday 28 March and continuing until Friday 1 April.
- These strike dates are for both the Four Fights and USS Campaign – please come out on the pickets and make so much noise that management cannot but hear why you’re there!