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UCU perspective on USS and pay disputes

As you will know the University and College Union (UCU represents all members of the USS pension scheme, and represents academic and related staff (grades 6-10) on wider terms and conditions of employment, such as pay. We would like to present UCU’s perspective on two current disputes – detrimental changes to USS (via UUK), and a further sub-inflationary pay offer, and failure to engage in sector-wide work on workload, pays gaps, and casualisation (via UCEA).

Those of you who are members of UCU will be aware of the two disputes and since Monday, 18 October, will have received ballot papers asking members to vote for industrial action, with the immediate aim of getting UUK and UCEA to return to the bargaining table and resolve the dispute hopefully without the need to start industrial action.

USS dispute

UCU has tried to avoid a dispute by meeting with employers throughout 2021. UCU sought compromise throughout this year, including submitting an alternative proposal to negotiations but as UUK declined to provide the necessary support to allow it to be costed on the same basis as the UUK proposal, it could not be voted on.

At a Joint Negotiating Committee meeting in August 2021 employers and the independent Chairperson of the USS decided to vote to impose heavy cuts on our pension. The cuts are based on a valuation of the USS scheme made at the end of March 2020 – a time when global economies and financial markets were in shock from the initial stages of the covid-19 pandemic. Since then the assets of USS have grown and UCU has asked for a 2021 revaluation of the scheme.

As pensions are very technical, we have created some videos that may help your understanding if you wish to delve deeper

UCU Solidarity Movement – Know Your Pension (Part 1) – YouTube
UCU Solidarity Movement – Know Your Pension (Part 2) – YouTube

Implications of the changes proposed by UUK (employer body)

The changes voted for at the August 2021 meeting, which UCU opposed, propose large cuts to your retirement income (for details see table further below).

The USS’s own projection, even with the inclusion of the uncertain defined contribution on top of the guaranteed benefits, sets the loss to one member, earning £50,000, at 18%, reducing guaranteed retirement income earned from the point of the changes by almost 1/5th.

If you look at the loss to defined benefits alone the UCU calculate the loss to the guaranteed income a member, aged 37, earning £42k would have earned over the rest of their career could be as high as 35%.

The USS model also assumes we all get a 4.35% pay rise annually (CPI+1.5%) which would be very nice if it were true.

Your employer has signalled a degree of scepticism about the recent valuation and the level of prudence used. We agree. That is why we are calling for our employer to support UCU calls for a 2021 revaluation of the scheme and to withdraw the proposed pension cuts. The value of our assets held by USS have increased by at least 14.6bn since March 2020. That is why UCU is asking employers to insist on a 2021 valuation with a level of prudence more like that used for all previous valuations before the 2020 valuations.

UCU and employers are in agreement about the need to reform USS governance and to explore options to see if a longer term solution can be reached. However, the increase in USS assets, the excessive prudence use and the effect of an indexation cap on the value of pensions are among the reasons why we believe the cuts proposed by UUK are unnecessary and will have a really detrimental effect on members’ pensions.

Pay dispute

As with USS, we believe the offer on the table from UCEA falls a long way short of what is affordable, as well as what staff deserve after working through a pandemic, a time many of us have seen higher workloads, diminishing action on equalities, and many challenges associated with the pandemic itself.

UCU’s reasons for going into dispute with UCEA over pay and wider issues are summarised as follows:

  • The employers have refused to move from the final offer they made in May of 1.5% for 2021-22.
  • This follows a 0% offer for 2020-21, after over a decade where our pay has been eroded by sub inflation pay offers. Inflation has been rising rapidly since the start of this year.
  • The Office for National Statistics reported CPIH in June at 2.4%, CPI at 2.5% and RPI at 3.9%.
  • A 1.5% increase over 2 years is in reality a steep real-terms pay cut, on top of over a decade of pay cuts.
  • Gender Pay Gap: We note that the email sent to all staff reflects on the gender pay gap (but not other pay gaps for other groups including disabled colleagues and those from racialised minorities). Heriot Watt’s own pay gap reporting shows that there are considerable pay gaps within the institution. The pay gaps at Heriot Watt are (median)  21% gender pay gap, 34% for disability and no median is shown for ethnicity. The email to all staff suggests the gender pay gap is down to occupational choices and a lack of women professors, but does not explain the institution’s own role in these gendered disparities, for example, how the work of women and men is valued by the institution. Further, there is no mention of how the university plans to address the 34% disability pay gap.  These problems are reflected across the sector and form a key aspect of the ‘four fights’ dispute. There is an urgent need for a framework which closes these gaps for all colleagues

Summary

We hope this gives you an overview of UCU’s reasons for being in dispute. We intend to have an open meeting regarding both disputes via Zoom @ 1pm on Thursday, 18th of November and we hope as many of you as possible can attend – details will follow.

In the meantime, if you have any questions or queries,  please come to the meeting or email your queries to ucu@hw.ac.uk (in confidence).

We appreciate you taking the time to understand the UCU perspective on both disputes, and if you want to join us in fighting for your pension, pay, and working conditions, you should consider joining UCU through this link: https://www.ucu.org.uk/join

Current Proposed Result
Accrual is 1/75th of annual salary below the cap. Accrual of 1/85th of annual salary below the cap At present if you worked for 25 years you would earn 1/3rd of your salary as guaranteed income every year in retirement plus a lump sum of 3 x that i.e. ~one year salary Under the new proposal you would either have to work longer to gain the same income or accept an income 12% lower.
Your pension broadly keeps up with inflation. Full indexation <5% inflation and half indexation between 5 and 10% inflation. An indexation cap of 2.5% above which your pension will not keep up with inflation If inflation goes above 2.5% your pension will not retain its buying power. The USS persona model assumes inflation will be on average 2.85% that is 0.35% above inflation every year that you will not get.
A salary cap of ~£60k, above which salary money goes into a defined contribution scheme (DC) A lower salary cap of £40k This means that if you earn above £40k more of your salary will go into a savings pot which pay a *one-off sum* retirement. Instead of the guaranteed income provided by defined benefit, you must either buy an expensive annuity or draw down income every year and hope it doesn’t run out while you still need it.

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