UUK have consulted Universities about a proposed review of USS’ governance structures, although its proposed terms are highly UUK-centric. We discussed these at a USS sub-JSNCC earlier in the week, where management asked Unions (although I was the only Union member there) to feed back. Documents can be found here: USS-subJSNCC 2022_8 Minutes 5 April 22 FINAL.pdf and USS-subJSNCC 2022_9 Governance review of USS – UUK consultation on the planned approach – July 2022.pdf

The points made during the meeting summarised as follows:

• Must be an equal partnership between UUK and UCU in the leading of this review. Concern with an independent chair would be that they may “side” with UUK;
• Need to review the process for the appointment and accountability of trustees; in particular how the independent directors are appointed and how members can hold directors to account on their performance. Note that the Pensions Act requires 1/3 of DB Trustees to be member-nominated.
• Suggestion to replace stage 1 of the review with a commissioning of a separate report – this will enable stage 2 to proceed more quickly.
• Should there be a separate “lessons learned” on what has gone wrong with USS?
• Status of the JEP – Question whether there is an obligation on the Trustees to follow these recommendations (we discussed this and unlikely but might be worth noting).

We decided that I would provided written suggestions to the Uni’s response, following consultation with UCU pensions reps, in addition to those in the meeting. I consulted reps. and just sent the following email:

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Dear Gordon,

Thanks for the chase. A few additions for you to consider in response, sourced from discussions amongst national UCU pensions reps, so they will broadly represent the UCU national position.

• Following our discussion of independent governance expert or no, the feeling is that the suggestion to get external governance experts involved is sensible. This is a really technical area of law, and regulation, and any proposals for reform are more likely to be credible if they’re produced by professionals. There is still a concern that independent experts might side with UUK’s stated position regarding pension plans, however this ought to be controlled for by joint UUK/UCU appointment of the reviewers/chair.
• The idea of a ‘lessons learned’ stage is good, though this could be published after the publication of the initial report so as not to obstruct the necessary changes suggested in it.

 

2. Are there aspects of the review which need to be included, or removed, or further emphasised?

• The current purpose of USS and objects of the company that acts as Trustee (USS Limited – USSL), are good, essentially – act as trustee for the benefit of relevant university staff. These should not be changed and probably should be out of scope for review. 
• The appointment and removal of USSL directors is critical. The review should consider whether the independent directors should be member elected, or whether the independent directors should be replaced with UCU/UUK appointed directors (note RPS has 50:50 union employer appointed directors). 
• The review should consider UUK’s role in USS governance. UUK is all HE in the UK, whereas USS is a subset. It’s also not entirely clear how the responses of institutions get translated into UUK formal responses. 
• The review should include accountability and oversight of USSIM.

 

6. Do you believe there are weaknesses in USS governance, and if you do which do you believe are the problem areas, and why?

• The decision to remove UUK and UCU’s right to recall their directors in 2018 should be revisited, as this weakened governance. 
• Currently, the only people who have rights as members of USSL are the directors who run the scheme. The review should consider whether membership of USSL should be broadened to include ordinary scheme members and employers, or whether the scheme rules should be amended to give ordinary scheme members or employers the same rights as members of USSL. 
• The directors are currently not representative of the scheme membership in terms of gender, age, or ethnicity. Directors from the financial industry are wildly overrepresented, this should be improved.
• A number of directors have conflicts of interests as VCs, this is akin to having CEOs on the board of a pension scheme, which is generally considered to be unwise.

 

7. What would ‘better’ look like to you in terms of USS governance (please be as specific as possible)?

• Consideration should be given to allowing ordinary members to elect the independent directors or replacing most or all of the independent directors with member and employer-nominated directors. 
• Membership of USSL be expanded to include ordinary members and employers 
• Restoring the right to recall directors. 
• Splitting the DB/DC schemes into two entirely separate organisations, with separate governance structures.
• A transparent and accountable valuation process, based on clear and credible evidence.

Thanks again for your engagement with this: management’s consideration of UCU’s position locally is much appreciated and we would be in a much better position if UUK did so with the UCU nationally.

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I imagine this will be the last thing I do for the branch in terms of USS. I strongly encourage whoever takes on the role of unofficial pensions rep. to push firmly and constructively at management: they have taken on board a large number of suggestions to their messaging with UUK as a result of discussions over the last two years, demonstrating that we can have impact over Kent’s voice in UUK. As Cox is now on the UUK board, I think this will be only more significant from now on.

Best wishes,

Chris