Industrial action 'likely' over proposed changes to USS

The University and College Union (UCU) has accused Universities UK (UUK) of proposing “unnecessary and damaging cuts” to the Universities Superannuation Scheme (USS), stating that a more progressive approach could be taken.

The union argued that employers should deliver on previous promises to challenge the scheme trustee’s underlying assumptions, rather than "attempting to slash” scheme member’s benefits.

It also warned that members are “likely” to vote for more industrial action if universities fail to make "radical improvements" to UUK's proposals.

The proposals, published as part of a consultation by UUK, would see a number of changes to the scheme, including the decreasing of the DB salary cap, capping indexation at 2.5 per cent a year, and reducing the rate members' pensions accrue.

However, UCU general secretary, Jo Grady, highlighted the plans to cut the DB element of members' pensions as "almost identical" to the ones which were previously put forward, and rejected by members midway through UCU's 2018 industrial action, emphasising that they now "come at an even higher price in terms of employer and member contributions".

Furthermore, she also warned that proposals to address the high rate of staff opting out of the scheme were "vague" and would not be implemented in time to prevent the "drastic" contribution increases, already scheduled for October 2021.

Grady continued: “UUK claims that they 'will continue pressing the USS trustee to reconsider its valuation assumptions', but we have yet to see concrete evidence of their commitment to doing so. If anything, they have de-escalated from their previous stance.

“Since our last round of industrial action, UUK has spent over a year in talks and negotiations assuring UCU that they will confront USS over its unilateral, poorly evidenced approach to setting contribution rates.

“But the response of UUK to USS’s refusal of their request for a review of the 2020 valuation has been weak, to say the least. UUK is talking about strengthening the employer covenant, but the concessions which they are asking USS to make in return for this are far too small.

“There will be months of further negotiations and lobbying. But as it stands, employers have offered very little to dissuade members from voting for another round of industrial action.

“USS is a uniquely robust defined benefit pension scheme, backed by many strong employers in a financially healthy and world-renowned sector of the UK’s economy. University staff deserve much better than the weak commitments and half-baked proposals which employers are putting forward.”

Commenting in response, a UUK spokesperson stated: "It is easy to simply oppose change but reform is necessary to tackle the scheme's funding gap and ensure that USS pensions are affordable for members and employers. We would welcome and be keen to examine alternative proposals from UCU."

UUK's consultation was launched amid the ongoing USS valuation, with USS's latest update suggesting that pension contributions may need to increase to as much as 56.2 per cent of payroll.

This prompted concerns from both UUK and UCU, who warned against the "unaffordable" increases, with UUK also requesting a review of the valuation approach, which employers have previously described as "unhelpful".

However, USS has since rejected this call for a review, stating that until new information or an alternative proposal are forthcoming, there is no justifiable basis on which to review the outcomes illustrated in previous reports.

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