NEWS


UCU‘confident’ of strike over contribution rise


By Victoria Tichá


The USS and UUK have reached a deadlock in pension negotiations, which could result in strike action


T


he majority of university staff will vote for strike action on pensions unless their employers concede to lowering


contributions to the Universities Superannuation Scheme closer to 8 per cent, the University and College Union has said. Jo Grady, general secretary of the


UCU, said she is “quite confident that university staff will vote for strike action” later this month unless higher-education employers offer to further lower the rate paid by members. An offer made by Universities


UK to restrict a rise in USS member contribution rates to 9.1 per cent of salary – compared with the current 8.8 per cent – in exchange for withdrawing the September ballot for strike action was rejected by UCU last week. With no agreement or change in actuarial assumptions, employee contributions will rise to 9.6 per cent. Speaking at a UCU media briefing


earlier this month, Ms Grady explained the latest offer represents another pay cut for university staff. She said:“We are concerned that


those on lower pay may decide they simply cannot afford to pay for a pension anymore, putting the future of the scheme at risk.” However, Ms Grady pointed out


there was still time for employers to put forward a compromise deal, potentially avoiding strike action. She said: “UUK could push


much harder on USS to ensure that these things are taken seriously by the scheme’s [trustee] board, but are not.”A joint expert panel published a report scrutinising the 2017 USS valuation last


10


Total loss under proposed changes to USS


Loss calculated by members’ salary if contribution rates rise to 9.6 per cent


Extra paid in contributions Total loss


Salary of £48,677


Salary of £59,828


Salary of £110,217


0100 200300 400 500 600 700800 £000s


Assumes CPI+2 per cent salary growth, with staff moving up froma starting salary of £40,792 and paying into USS for 30 years


Source: First Actuarial


EMPLOYERS ARE PAYING £400M EXTRA A YEAR


COMPARED WITH 2011


INTO USS,


year, whose recommendations suggested a significant decrease in the overall contributions required by the scheme. She added: “ForUUKto try and


[prevent our ability to] engage in a legitimate debate and potentially ballot for strike action in the run-up to the 2020 valuation... the very idea that we would tolerate that is absurd. “But it also suggests they are


going to come for pensions again [in the 2020 valuation]; why else would they want to tie our hands if they were just intending to be nice and reasonable employers?” A spokesperson for UUK said:


“The suggestion that UUK (and employers individually) have not pushed USS to implement all the JEP recommendations is wholly inaccurate. “It is unthinkable that employers would agree to pay an additional


war with the employers Hugh Nolan, Spence & Partners


It is hard to see how university staff will win the


Loss in benefit


£250meach year into the scheme (and bear the consequences of doing so) without first exhausting every possible avenue to a lower rate.” The spokesperson added: “At the


joint negotiating committee [held on August 27] UCU negotiators indicated they were unwilling to compromise, refused to consult their members over the alternative offer, and consequently rejected it. “Our offer would result in a lower


member contribution rate of 9.1 per cent – exactly aligned with the rate proposed by the JEP in its first report, which employers and the union support.” Arecent First Actuarial analysis


of recent changes, including the contribution rise to 9.6 per cent, revealed typical schememembers could pay around £40,000more into their pension pot but receive £200,000 less in retirement, leaving them£240,000 worse off in total. Responding to the figures, aUUK


spokesperson said: “Compared with 2011,employers are nowpaying more than £400mextra per annum into USS – having increased their contributions from16 per cent to 21.1 per cent of salary fromOctober 2019. “Scheme members will realise


that winding the clock back to 2011 and freezing the scheme in time is just not credible.” The comments came a week


before ballots opened in 69 UK universities. Earlier this month, the trustee of the USS issued a series of consultation documents in a bid to commence agreements with employers on a suitable recovery plan for the scheme. Commenting on the figures, Hugh


Nolan, director at Spence&Partners, said: “At the end of the day, the employers have to manage their cash responsibly…it is hard to see how university staff will win the war with theemployers.” He continued: “Employers cannot


spendmoney that they do not have, and although it is very sad the employers might hold the line, they will do so because they have to.”


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