UCU members took serious and sustained industrial action in the face of damaging proposals from the employers which would effectively destroy the USS pension scheme. But the fight is not over!
UCU’s double ballot on pay, equality and pensions has opened. The Keele UCU committee urges members to vote YES to strike action and YES to action short of strike. Here is why:
What is happening to our USS defined benefit pension?
This dispute is about the failure to implement the independent recommendations of the Joint Expert Panel set up at the end of last year’s strike action. Plans have been adopted on August 22nd that will once again lead to contribution increases. These plans are based on a flawed methodology which has been repeatedly debunked (see our technical note attached). Meanwhile, the value of our pensions has collapsed since the close of the final salary scheme in 2011. Consider this: the cumulative effect of detrimental changes since 2011 means that the typical USS member stands to lose £240,00 in retirement.
If we do not put an end to this trend, USS will become unaffordable to most of its members. Employers will argue that the scheme is unsustainable and will once again demand its closure as a Defined Benefit scheme, as they did in 2017. Our historic strike action last year stopped those terrible proposals. But the fight is not over and the threat to USS pensions hasn’t gone away. We need to break the cycle where each new valuation since 2011 is used to reduce benefits and increase costs. We know the advice employers have received from the legal firm Pinsent Mason is exactly this: to chip away piece by piece at the scheme or, as they put it, to ‘eat an elephant one bite at a time’. This needs to stop now.
Why are USS and employers turning their back on the JEP?
USS and employers have not been able to effectively articulate why the full set of recommendations proposed by the JEP cannot be implemented, as agreed by both sides in the 2018 dispute. They are trying to blame the requirements of the Pensions Regulator (tPR). But neither USS nor the employers tried to persuade the Regulator to accept them, despite tPR saying that it was open to being persuaded. The USS Executive was also rebuked by tPR for misrepresenting the regulator’s views on discount rates in key documents proposing higher contributions. In a letter sent in January 2019, the Regulator found USS’s statements to be “factually incorrect” and asked USS to consider making a correction. This was not done.
Worse, it has since emerged that the email from tPR was not passed on to the USS Board of Trustees until May, i.e. after the 2018 valuation was completed. This was uncovered after Professor Jane Hutton, a UCU-appointed trustee of USS, reported to the Pensions Regulator her concerns about attempts to obstruct her from obtaining information that was necessary for her to fulfil her fiduciary responsibility. Since blowing the whistle on USS’s potential malpractice, Prof. Hutton has been suspended from her position on the board of trustees, preventing her from accessing crucial information about the USS valuation.
What about UUK’s latest offer? Can we not resolve this through negotiation?
In an attempt to prevent industrial action, UUK have made a last-minute offer to UCU on August 27th (see attached). This includes a reduced employee contribution of 9.1% for the period 2019-21 instead of the 9.6% decided on August 22nd. UCU’s Higher Education Committee considered the offer last Friday and decided by a large majority not to accept it. Here is why:
- Whilst the offer contains a reduced increase of contribution of 1.1% instead of 1.6% for the period 2019-21, the underlying position remains unchanged. Under the offer, our contributions are still due to soar to 11% from October 2021.
- The offer is made under the condition that cost-sharing be accepted in respect of future valuations. Cost-sharing, under USS Rule 76, is a default arrangement taking effect when normal negotiations regarding contributions fail. Under this arrangement, when a deadlock occurs USS can impose contribution hikes and these are to be shared in the ratio 35:65 between employees and employers. A generous reading of the UUK offer is that it merely reaffirms cost-sharing as the default arrangement, in other words it simply says that existing rules will continue to apply post-2021. However, a less generous reading is that the UUK offer ‘locks in’ cost-sharing as the new principle for all future valuations, making it a requirement that can no longer be overturned. If true, this would be a major political point that the union would be conceding. UCU cannot accept the offer unless full guarantees are received that Rule 76 remains nothing more than a default or fallback arrangement.
- The offer shows no sign that UUK is prepared to abandon USS’ flawed valuation methodology once and for all. UUK need to commit to replacing Test 1 and working with UCU to stop valuing USS on a de-risking basis. They also need to join UCU in lobbying the Government to stop regulating USS as a single employer private pension fund.
The UUK offer cannot, in its current form, justify calling off the ballot. Beyond the catchy headline of a reduced 9.1% contribution lay a host of questions which the offer does not resolve. Now is the time for UUK to show that they are genuine in wanting to achieve an agreement by working with UCU to implement the JEP in full, as agreed at the end of the 2018 strike action, and offering guarantees on long-term contributions and the framework for future valuations.
Vote, Vote, Vote!
The Keele UCU committee urges all members to vote YES in both ballots. UK academia has changed beyond recognition in the last decade under the aggressive forces of neoliberalism and marketisation. Our pay is declining, our pensions are under attack, casualisation is growing by the day, and inequalities continue to plague the sector. We have a collective responsibility – and the power – to avert the slow death of British public education.
UUK have allowed USS to get away with ignoring key JEP recommendations. A strong turnout and mandate for action is needed to concentrate their minds. Unless this happens, employers will feel emboldened and will continue to erode our working conditions ‘one bite at a time’.
Whatever your intentions regarding industrial action, please vote. As most of you know, the 2016 Trade Union Act introduced a 50% turnout requirement for all ballots. This gives abstention a whole new meaning. Far from simply expressing one’s unwillingness to weigh in one way or another, each abstention makes it that much more difficult to reach the required threshold. It effectively becomes a vote against others’ ability to take lawful industrial action. In other words, abstention hurts other people’s ability to exercise their democratic right to strike. If you are not willing or able to take action yourself, please be supportive of others who are. It only takes a minute to cast your vote using the prepaid and pre-labelled envelope.