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Strike for USS

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Vote now to save USS – Ballot closes Friday 19 January.

UCU is currently balloting its members for industrial action over changes proposed by UUK to slash USS members’ retirement income. The ballot closes on Friday 19 January and the union is urging any members who have not yet voted to cast their vote immediately.

Further information can be found at https://www.ucu.org.uk/uss

Vote now to save USS

Please vote now to save your pension. https://www.ucu.org.uk/strikeforuss

Posted by UCU – University and College Union on Monday, 4 December 2017

Overhaul of university pensions could leave staff £200,00 worse off in retirement

The following article is taken from the UCU website.

Staff in some of the UK’s most elite universities will see the value of their retirement income drop by as much as £200,000 if hardline proposals from universities are brought in. Analysis by independent experts First Actuarial shows that a lecturer starting work today could be £208,000 worse off over the course of their retirement under the new proposals for the Universities Superannuation Scheme (USS).

The modeling also reveals that the lecturer would be £385,000 worse off than if they worked in their nearest new ‘post-92′ university where academics’ pensions are paid by the rival Teachers’ Pension Scheme (TPS) rather than USS.

The report also looks in detail at the impact on staff in USS and finds that a lecturer who started in 2007 and has 10 years’ past service could see their annual pension fall by just over £6,000 a year in retirement, or £131,000 in total. The total loss in retirement for current USS members reduces with the more past service they have. Someone with 20 years’ past service could lose £35,000 in total.

The revelations about how much staff can expect to lose come UCU members start to receive ballot papers asking them to back a sustained campaign of strikes and other forms of industrial action. The union has warned of “chaos on campuses” in the new year if the dispute cannot be resolved. The postal ballot opened on Wednesday and will close on Friday 19 January.

UCU general secretary Sally Hunt said: ‘This analysis reveals just how damaging UUK’s hardline plans for the pension scheme would be on an individual basis for people who have planned and saved for their retirement.

‘Already offering worse benefits than other schemes available in the sector, these proposals would devastate USS members’ pensions and could create a recruitment and retention crisis as staff jump ship to secure their futures.

‘I would urge all members to take a look at what these proposals would mean for them and then make sure they vote in the ballot for industrial action.’

Table 1: Comparison of current pension income against UUK’s plans and current Teachers’ Pension Scheme

Staff profile Current deal UUK proposals Loss total Annual loss TPS
Starts on £39,992 and moves up pay spine to £47,722 £434,000 £305,000 £129,000 £6,000 £580,000
Starts on £39,992 and moves up pay spine to £58,655 £503,000 £346,000 £157,000 £7,300 £662,000
Starts on £39,992 and moves up pay spine to £110,217 £614,000 £406,000 £208,000 £9,600 £791,000

Assumes all work 30 years paying into USS. Retirement of 27 years. TPS members pay slightly higher contributions.

 

Table 2: Impact of UUK’s plans for different staff already in USS

Staff member Current deal UUK proposals Loss total Loss annual
To retire in 2047 aged 68. Started on spine 31 (now at £33,518) in 2007 (10 years’ past service). £562,000 £431,000 £131,000 £6,100
To retire in 2037 aged 67. Started on spine 31 (now at £33,518) in 2002 (15 years’ past service). £427,000 £339,000 £88,000 £4,100
To retire in 2027 aged 66. Started on spine 31 (now at £33,518) in 1997 (20 years’ past service). £426,000 £391,000 £35,000 £1,600

 

Change attitudes to avoid pensions bust-up

Sally Hunt, General Secretary of UCU, has written the following article for the THES to explain why employers must change their ‘counterproductive’ attitudes towards risk to avoid further cuts to academic pensions. It can also be found online via the THES website.

The past six years have been bad ones for members of the UK’s Universities Superannuation Scheme (USS), the largest pension scheme in the higher education sector and one of the biggest private sector schemes in the UK. Twice have members seen the value of their pensions reduced and been asked to pay more for the privilege.

The reason is the valuation of the fund’s deficit by the USS, which uses methodology so prudently that it has become counterproductive and now stands in the way of efforts to retain benefits at a sustainable and attractive level.

Make no mistake, this is storing up fundamental problems in the academic labour market. Ten years ago, a report commissioned for Universities UK examined, among other things, the feasibility of having one pension scheme for academic staff rather than two. It concluded that a major barrier to any move of staff from the predominantly pre-92-based USS into the mainly post-92 Teachers’ Pension Scheme (TPS) was that the USS had superior benefits such as an earlier retirement age.

Now, after two damaging rounds of USS benefit cuts, the world has turned on its head. Research from First Actuarial, recently commissioned by the University and College Union, finds that while TPS members pay a little more in contributions, their cumulative pension benefits are far superior.

To give an example, a lecturer at the pre-92 University of Oxford, who makes normal progression up the national pay spine and retires after 30 years’ service, would receive about £150,000 less over the course of their retirement than a similar lecturer at post-92 Oxford Brookes University.

With pre and post-92 universities existing cheek by jowl in most major cities, this situation is repeated throughout the UK, so that we now have in effect a two-tier pensions system for academic staff, with those in the TPS doing best.

I commissioned the research because members have been telling me since 2015 that the rival pension packages now on offer are influencing their decisions about where to work and, having seen the figures for myself, I believe them.

I am sure that some of our most famous institutions will be as concerned as I am about the recruitment, retention and reputational issues this creates as the news that Russell Group and other pre-92 institutions pay out the lowest pensions in the sector permeates outwards.

Yet, while urgent action is needed to address the issue, if we are not careful the situation could be about to get even worse. The next estimate of the USS deficit is currently under discussion. The UCU has real concerns about the methodology used but nonetheless I do believe that it is possible to reach an agreement that will at least retain benefits for members without increasing costs for employers.

But to achieve that, employers need to move away a little from their own assessment of risk. The USS is fundamentally a healthy and growing scheme that has enough cash flow to pay benefits at the current level for the next 100 years. Similarly, the higher education sector itself, while buffeted no doubt by Brexit, has seen income continue to rise and staff costs as a proportion of its expenditure continue to fall.

Most importantly, in an extensive independent study of the pre-92 sector commissioned by the USS itself, the conclusion is that the sector is strong and stable for at least the next 30 years. The USS is so assertive about this that they have even put it in the information videos that they make for members.

To make it plain, a small adjustment to the risk that employers are prepared to take would allow the sector some breathing space.

I will now be seeking meetings with vice-chancellors in USS institutions and my message will be clear: if you are prepared to work with us to find a way to retain benefits and keep contributions as they stand then you will find a willing partner in the UCU.

While we will not hesitate to act to defend members’ interests, I will do everything in my power to reach an agreement which, at the very least, does not further worsen the competitive position of USS institutions compared with TPS ones. Given how important pensions are as part of the sector’s overall pay package, I hope that others will work with us to achieve that sensible aim.

Sally Hunt
UCU General Secretary