Pension campaign image with text: Your pension under attack

January 2019 Pensions update

UCU’s national pensions dispute continues, with the USS pension scheme now refusing to implement the proposals of the Joint Expert Panel, which our branch endorsed last September. Please read on for a non-technical update from Pensions Officer Nick Hardy on the current state of play.

Since my last update, in December, USS has started consulting employers on its new, 2018 valuation. In theory, this valuation was supposed to be an opportunity for USS to implement the proposals of the UCU/UUK Joint Expert Panel (JEP).

USS refusing to implement key recommendations

These proposals were meant to be an easy short-term compromise, and our employers had already accepted them without much fuss. We already knew that if USS implemented all of them, the Scheme would be in surplus rather than in deficit, and neither members nor employers would have to increase contributions beyond the current rate of 26%. But USS is sadly refusing to implement some of the JEP’s key recommendations. As my USS Briefs colleagues and I told the Financial Times, USS has effectively rejected the proposals which would require it to admit that it got anything wrong in its hugely controversial 2017 valuation.

Increased pension contributions and continued uncertainty

The result of the Scheme’s refusal to budge is that we are looking at contribution rates somewhere between 29.7% and 33.7%, depending on the outcome of USS’s current consultation with employers and the amount of extra financial support they are willing to commit.

The terms of the consultation are complex, but in brief: if employers can haggle USS down to 29.7%, they will probably be willing to make the extra payments required for the remainder of this valuation. If they can’t, we’re back at 33.7%, and employers are likely to revert to cutting staff benefits or taking even more drastic measures. As your Pensions Officer I will be lobbying the University to keep the pressure on USS, and get the best outcome possible via the consultation, but we need to prepare ourselves mentally for the possibility of another strike ballot. USS members have not been well served by the Scheme’s managers, and even if we escape this valuation relatively unscathed, the Scheme’s technical failings and governance blind spots will still require a long-term solution.

Nick Hardy

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