An update on USS and strike action
We are now only days away from a period of industrial unrest which I strongly believe could have been avoided and, with goodwill on all sides, could still be avoided. I have been very public with my criticism of the pension valuation and the subsequent decision by UUK to advocate what is in effect closure of the defined benefit element of the USS scheme. I do not believe that either party to the USS negotiation have exploited the full range of options which could have generated a meaningful pension for University staff without jeopardising the financial future of the sector. I am therefore calling for an early return to negotiations, with a more open and imaginative approach from both parties. A return to active negotiations with a real willingness by all sides to explore every option would of course enable deferral of industrial action until those avenues have been fully explored.
In short, I question the need for the change in the valuation assumptions last autumn which gave rise to the scale of this challenge. Second, I would ask that consideration is given to options which would protect the less well paid in the sector and future entrants, perhaps by restricting DB to those in the national pay framework and placing the higher paid into a DC only scheme. Thirdly, I believe it that instead of focusing on removing everyone’s choice on DB USS should look to give individuals the choice to opt out of DB where their circumstances make this less attractive e.g. some overseas staff. Finally, I would suggest it is time for government to take as close an interest in pension provision as it does in other aspects of reward in this sector. This could be through legislation which enables risk sharing DC schemes or by underwriting pensions for everyone currently in USS in a way that is more reflective of government support for unfunded public sector schemes such as TPS.
I recognise that there is a deadline being demanded by regulators. But it is vital that we find a way of resolving an issue which will be costly, both financially and in terms of reputation, for Universities, the sector and - most importantly - its students and staff.
Execblog Resource
16 Feb 2018 11:05
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Tags: Vice-Chancellor
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[Skip to the latest comment]Parley
Awesome!
16 Feb 2018, 18:22
Clare Walker
Thank you Stuart
16 Feb 2018, 18:53
Justine Mercer
I have not had a chance to consult with my Warwick UCU colleagues, but, speaking in a personal capacity, I think this is a powerful and very helpful statement (Warwick UCU Local Branch President).
17 Feb 2018, 18:46
Dennis Leech
This is an excellent statement by our vice chancellor. It is to be hoped that the UUK and the government will take note and come to their senses instead of unthinkingly following arbitrary rules under unrealistic and overly prudent assumptions about the future.
18 Feb 2018, 03:16
Luke Tibbits
Thank you, a very helpful statement.
18 Feb 2018, 09:32
Jacob Phelps
Thank you. This is the kind of intellectual and moral leadership I wish Lancaster University would show.
18 Feb 2018, 19:43
James Sprittles
Very sensible, thank you.
20 Feb 2018, 12:45
Neil Gillespie
I am a grade 5 technician and was delighted to become part of the defined contribution scheme just over a year ago. The USS scheme is the main reason I have chosen to stay with Warwick University as I am up for retirement in around 20 years and there aren’t many places left that offer such a good pension scheme. I fully support the action academic staff are taking to protect their benefits but I am also very reluctant to negatively impact the student experience as it is difficult enough to attain a good degree.
Many staff would support a ‘3rd way’ as proposed by Stuart, surely there must be a compromise to be had with more creative thinking, especially for staff at the lower end of the pay grades.
20 Feb 2018, 13:10
Mathew Mannion
Thank you Stuart, your strong voice is very much appreciated.
20 Feb 2018, 13:35
Claude Baesens
Thank you Stuart. Hoping more VCs will follow suit.
20 Feb 2018, 14:19
Louise Wadsworth
I’m curious how the University can so vehemently maintain this position given the decision to close its own DB scheme for grades 1- 4 staff (the least well paid) and replace it with a DC scheme several years back. Was there no room for an open and imaginative approach in this case?
20 Feb 2018, 16:33
Simon Williams
Thank you Stuart, wise words and much appreciated.
21 Feb 2018, 11:57
Stuart Stanley
An interesting detail which seems to have emerged today:
The UUK response to the USS consultation recommended changes to the future returns forecast which resulted in the scheme deficit growing from £5.1bn to £7.5bn based on a view from a minority of employers (42%) who wanted less risk to be taken (vs 53% of employers who felt the current risk was acceptable, and 5% who felt that more risk could be taken).
In addition to the fact that this decision has been made on a minority basis – it seems that Oxford and Cambridge Universities are being ‘over-represented’ as the individual colleges are counted as employers as well as the University itself. UUK has today said that oxbridge colleges made up one third of those employers who wanted less risk.
It would be very interesting to see figures restated by the headcount/FTE of the employers rather than the absolute number of employers as it doesn’t particularly feel like UUK is being transparent on this!
Sources:
https://www.uss.co.uk/how-uss-is-run/valuation/2017-valuation-updates/uuk-responds-to-usss-consultation-on-funding-proposals
https://twitter.com/JosephineCumbo/status/966205373349801985
21 Feb 2018, 17:08
Saul Schleimer
It would be very very interesting to know how the employers for/against correspond to employee numbers. That is, 42% of the employers wish to “reduce risk” as defined by USS. What percentage of employees do those employers account for?
You can find old numbers here:
https://www.uss.co.uk/%7E/media/document-libraries/uss/how-uss-is-run/reports-and-accounts/reportaccounts2009.pdf
on page 43. According to these, as of 2009 Oxbridge employees account about 10% of scheme members.
22 Feb 2018, 10:24
Beverley Cannell
I think Louise Wadsworth raises a very relevant point. It seems that until something affected people who are senior at the University, action wasn’t taken.
I also would like to know why the % contribution rate for those on Grade 5+ is higher than the maximum % contribution rate for Grades 1-4. Shouldn’t the same percentage range be offered as all staff should be equally valued and the difference in contribution by those staff members at higher grades is already covered by offering different grades/merit pay/more annual leave etc.?
Clearly those on a higher income will be able to save more money by being able to put in a higher percentage to their pension, but they are also earning more than Grades 1-4 and some people at Grades 1-4 would like like the same opportunity to increase their maximum % contribution rate. Why is the University willing to pay more towards Grade 5+ pensions other than saying that staff at Grade 5+ are more valuable than Grade 1-4?
I really have nothing to contribute to the current USS discussion, but to be clear, despite my comments above I do wish that those affected get a positive outcome; ultimately, we’re all in this together in simply wanting a secure future for ourselves. Stuart, Louise’s comment resonates with me, as when you say that the “less well paid” are affected… we’re still here if you look a little further down.
22 Feb 2018, 17:27
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