Thursday 27 January 2011


University Pensions: Time to Plan for Strike Action

All University employees who are members of the USS national pensions scheme should now plan for strike action over pensions. The fine detail will be agreed at a meeting on the 1st February, but it is now certain that our employers will try to force through large cuts to the scheme.

To summarise:

  • The maths is a little complex, but the eventual outcome is clear: we stand to lose a quarter or a third of our pensions. If that wasn't bad enough, the right to keep the same pension if made redundant will be abolished in early 2013 -- just around the time that lay-offs resulting from the 40% cut in HEFCE funding are likely to bite. A week ago the USS consultation working group reported back with recommendations for some improvements to the plans, but the main substance remains. And there is no guarantee the employers will even accept these modest proposals.
  • On the other hand, the actual scheme continues to be in rude health (see notes below for more details). The obvious conclusion to draw here is that the employers' proposals are nothing to do with necessity and everything to do with reducing the costs of employing University staff. They're saying quite clearly: you're not worth it!
  • The USS consultation (~5,000 respondents) and the UCU on-line survey (~30,000 respondents) were overwhelmingly against the changes (96% in the UCU case; the USS has not published its results, but informal feedback indicates a similar response).

It is worth noting that other similar proposals have been blocked by industrial action. For example the worst of the BBC's recent proposals were withdrawn after the BECTU union took a strong position against them. There is nothing inevitable here, and given that the UK has some of the worst pensioner poverty in Europe (e.g. on average 25,000 deaths from cold weather and malnutrition each winter, with worse expected this year), there is absolutely no excuse for these attacks on our futures.

None of us wants to strike, but the best way to avoid action is a solid vote in favour -- the next negotiation meeting will happen on the day the ballot results come through, and if there is a strong mandate from membership then the likelihood of the employers backing down will be higher. If they don't back down, then we have no alternative.


Notes on the health of USS.

The UCU points out that there was no crisis in the scheme when the proposals were put in place a year or so ago: it was then and continues to be in good health. In addition, since that time:

  • the rise in stock prices has put £8 billion back into the fund's value (it is now worth almost as much as it was before the crash)
  • the abolition of default retirement age and the CPI/RPI change that are now planned at national legislative level mean large savings for the fund

So -- whilst there remains a possibility that some change might be needed in future, there is no crisis and certainly no need to make the huge cuts that are proposed. (Note that possible future shortfalls were estimated to imply the need for a 0.9% increase in contributions by the USS actuary; the UCU offered 1.1%, but this was turned down.) It seems that there is a different agenda related to cost cutting and repayment of debts incurred in helping out the finance industry, and it is instructive to note that the changes re. loss of benefits on redundancy are set to kick in during 2013, just as the worst consequences of the new student fees regime will become apparent. We face significant redundancies timed neatly to coincide with the loss of pension rights for those made redundant.

If you're near to retirement the proposal is for a 2-tier scheme with existing members retaining some benefits of the old rules; however, the history of other 2-tier schemes indicates that the upper tier never survives more than 3 or 4 years (why should some members pay the same for a vastly inferior product?).


Please vote in favour of strike action (and action short of a strike) in the UCU ballot in February.

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