Last week the Joint Expert Panel (JEP), which UCU convened with employers as a condition for calling off the pensions strike, issued its first report. The report deals exhaustively with USS’s 2017 valuation. The report has surpassed expectations. It argues that the contribution rate needed for this valuation can be reduced from the 36.6% currently required by USS to 29.18%, which is not much higher than the previous rate of 26%. It also shows that the figure could easily be pushed much lower, but out of a sense of urgency and need to secure USS and other parties’ assent, it has left any more radical changes for the second phase of its work, which will bear on future valuations. The JEP report is an interim compromise, but it’s not a bad one. It shows that UCU was right to go on strike, while employers were wrong to insist on the size of the scheme deficit and the need to cut member benefits.
At the same time, USS members will have received notification from USS of its open online member consultation on the cost-sharing arrangements to cover its own, much larger calculation of the scheme deficit, which it decided to go ahead and impose at the same time as the JEP was being set up. The JEP report gives you a solid basis to respond robustly and critically to USS’s consultation questions. You should feel free to give full and forthright answers to two questions.
In particular, to question 3 (‘Contributions shared 35:65 between members and employers respectively’), I will be answering that the contribution increases should fall entirely on employers rather than being shared with members. As the JEP demonstrates, there was no need for them to propose radical cuts to member benefits, which triggered the strike action, or to hold out for so long that USS felt obliged to impose contribution increases on us. Our employers, and specifically their representative, Universities UK, are responsible for the overinflated 36.6% contribution rate, so they should pay it until the JEP’s proposals have been accepted and given rise to a new, cheaper deal.
To question 4 (‘Increased contributions under the cost sharing rule’), I’ll be telling USS that these increased contributions are, in fact, unnecessary. The JEP report shows that the scheme could have reached a no-deficit position with minor, prudent adjustments to its valuation assumptions and methods. But USS refused to listen to its critics and it gave employers too much influence over the valuation process, as the JEP report explicitly states.
BUCU Pensions Officer