Dear colleague,
I am writing to you because like most other staff at your institution you are likely to be a member of the USS pension scheme. I wanted you to know that Universities UK have recently asked your employer to consider proposals which would mean a reduction of thousands of pounds in the annual pension for most members. That is why UCU has called a ballot for industrial action which starts on 1st October.
The proposals include the closure of the final salary section of USS, the move of all members into an inferior career average scheme, a £40,000 earnings cap above which benefits will not apply, and a new defined contribution pot the income from which would depend upon investment performance and would not be guaranteed.
Whether you are currently in the final salary section, already in the career average section or have not yet joined USS the proposals will likely mean a reduction in the worth of your annual pension of thousands of pounds according to analysis undertaken for UCU by independent experts First Actuarial. The table below gives a few examples of typical career paths and is worth printing out.
| Mid-career profiles – current and proposed total benefits converted to annual pension | ||||||
| Career profile | Current USS final salary section (£) | Employers’ proposals (£) | Annual loss final salary section members (£/%) | |||
| Age 40, joined scheme at 25, retires at 68 on salary of £45,954 | £33,231 | £27,978 | -£5,253 -15.8% | |||
| Age 51, joined scheme at 36, retires at 68, final salary of £45,954 | £25,235 | £22,299 | -£2,936 -11.6% | |||
| Age 40, joined scheme at 25, retires at 68 on salary of £54,841 | £39,657 | £32,316 | -£7,341 -18.5% | |||
| Age 40, joined scheme at 25, retires at 66 on salary of £75,000 | £46,050 | £33,604 | -£12,446 -27% | |||
| New joiner profiles – current and proposed total benefits converted to annual pension | ||||||
| Career profile | Current USS career average section (£) | Employers’ proposals (£) | Annual loss career average scheme members (£/%) | |||
| Age 25, joins now, retires at 68 on salary of £45,954 | £26,158 | £25,481 | -£677 -2.6% | |||
| Age 36, joins now, retires at 68 on salary of £45,954 | £20,597 | £19,800 | -£797 -3.9% | |||
| Age 25, joins now, retires at 68 on salary of £54,841 | £30,007 | £28,204 | -£1,803 -6.0% | |||
| Age 25, joins now, retires at 68 on salary of £75,000 | £31,917 | £28,389 | -£3,528 -11.1% | |||
Next week as the ballot opens we will send every member a detailed First Actuarial analysis of the proposed changes which contains many more examples than I have space for above.
What you should also know is that the proposals will mean your pension will be worth less than that of someone on the same salary and working in a new university but who is a member of the Teachers’ Pension Scheme (TPS) rather than USS. Even allowing for higher contribution rates in TPS, the difference is startling. Someone aged 40 with 15 years’ service who retires on £45,954 would have an annual pension worth 56% more in TPS than in USS.
When one considers that USS institutions often in other contexts describe themselves as some sort of higher education elite, it seems extraordinary that they are prepared to see an important benefit such as the pension fall so far below the going rate in other universities.
That is why UCU’s USS conference held last Friday agreed to a ballot for industrial action unless agreement can be reached. As I have said, the ballot will begin next Wednesday, 1 October. Given the employers’ determination to push through these detrimental proposals, we will need to take serious industrial action. Conference agreed that this would take the form of a ban on the setting or assessment of work, and that any attempts to impose punitive pay deductions in response would lead to national strike action.
As I hope you can see, this is a very significant attack on your pension income, and one that the union and its members must respond to. If we are to persuade the employers to back down, we will need a clear, decisive and substantial mandate from you. I hope you vote yes to defend your retirement income but whatever your views, it is vital that you participate. Please share my message with colleagues who are not in the union and suggest they at join us today so they can help us defend pensions. I will write again next week as the ballot opens.
Sally Hunt UCU general secretary
PS You can find more information here.