Southampton UCU raises concerns over use of UUK survey in employee consultation

The Southampton University and College Union (UCU) Executive Committee has raised concerns over the use of a Universities UK (UUK) survey when consulting employees on the proposed changes to the Universities Superannuation Scheme (USS).

In particular, the officers have argued that the survey in question is “partial, poorly framed, biased and unhelpful in a number of ways".

In a letter to the University’s vice chancellor, they explained that the survey is biased in the sense that it elicits only one possible answer that can then be used to justify a freeze or reduction in contributions.

This referred to a specific question, which asked members whether they consider the promises provided by the defined benefit (DB) part of the scheme (the USS Income Builder) to be worth retaining going forwards, "regardless of the cost" to them.

“This is clearly biased since nobody could reasonably consider a cash benefit 'worth retaining' 'regardless of cost'," the letter stated.

It also alleged that it was misleading to include references to the university contributing over one-fifth of members’ salary into their pension, arguing that what matters to current members is the amount the employer is willing to pay in towards building future benefits, with a "significant share" of the current contribution used for deficit recovery.

Alongside this, concerns were raised that there was no opportunity for members to express their views on the proposed changes in their own terms, with the committee stressing that many members would like the university to push back harder against the existing valuation, which should “never have been pushed through in March 2020”.

It stated: “UCU sincerely hopes that consultation with USS members at Southampton over this issue, which has the potential to derail so much at the university over the coming year, will involve more than this survey.

“We are committed to working with the university. Crucially, the university must commit to continuing engagement with UCU, which represents staff on this issue in negotiations with UUK and USS.”

In response to the letter, University vice chancellor, Professor Mark. E Smith, explained that the survey is “just one step in the process”, with the university previously holding a series of eight online briefings to engage with scheme members.

He also clarified that whilst the university has not previously sought views and input via a survey, given the nature of the valuation outcomes and the impact of home working, it felt sensible to use the tool offered by UUK.

He stated: “We decided to use it un-amended to ensure we could distribute it quickly to staff to give sufficient time for their consideration and responses and for us to use the feedback in the university’s consideration of its response.

“With only a seven-week window for the whole consultation process and falling over Easter, getting it out was important.

"We also used it un-amended to ensure we were being consistent with other employers as we understood the majority of institutions to be using it in such a form and to avoid concerns from our staff that we were adding any of our own judgement into the questions.

“These reasons also explain why we stayed with a fixed responses format, rather than also encouraging narrative text comments to help ensure at this stage a swift analysis of responses.”

Smith also confirmed that the Pensions Committee is aware of concerns around the wording ‘regardless of cost’, confirming that these concerns will be reflected on when the university is considering staff responses.

In addition to this, he addressed concerns that members are only interested in contributions for future benefits and that deficit recovery is an obligation of the employer, emphasising that decisions at past valuations on benefits and contributions have led (in part) to the current deficits on past service and that past service is in respect of current members as well as pensioners.

"In the nature of a scheme with DB elements, decisions on these key elements drive the contributions of each in the future (unlike a DC scheme) part of what is being paid now is a reflection of that as this part of the scheme is mutual and not an individual identifiable pot," he said.

"Moreover, as you may be aware the USS rules state specifically that changes in cost are shared between employers and members whether they relate to past or to future service benefits.

"Given all of this it is entirely appropriate to think of employer as contributing 21.1 per cent of salary into your pension.”

The UCU Executive Committee had also highlighted references to the USS Investment Builder as "unhelpful”, with the group stating that whilst this was attractive amid the lifetime of the 1 per cent match, since its withdrawal, members are more exposed to the considerable investment risk the default arrangement bears.

“This was demonstrated, for instance, by the steep decline in the USS Growth and Moderate Growth Funds' value in 2019. The university should be warning colleagues about the risks of the Investment Builder,” the letter stated.

In his response, however, Smith said that is not clear what exactly underpins the argument that removing the match contribution has affected the investment risk for members in the Investment Builder.

"And of course it is the returns that are achieved from investments over the long term that are of most significance for pensions savers not short term fluctuations,” he added.

Smith concluded: “We are clear that consultation and engagement with USS members are essential during the valuation process.

“Our commitment to working with UCU and with members remains firm, as we have evidenced with our extensive staff briefing process, our Sussed engagements and our ongoing work with UCU in JNC, contributions to Pensions Committee and with the focused engagements on pensions.

“We will continue to build on our past approaches and seek to engage effectively as widely as we can, hoping to use the advantages of remote working and on-line engagement."

UUK has declined to comment at this time.

    Share Story:

Recent Stories


Opportunities within asset-backed securities
Pensions Age Editor, Laura Blows, speaks to AXA Investment Managers Alts Co-Head of Securitised & Structured Assets, Christophe Fritsch, and Senior Portfolio Manager for Structured Finance, Xavier Lassau, about the opportunities within asset-backed securities
Alternative credit
Pensions Age editor, Laura Blows, is joined by Royal London Asset Management fund manager, Diversified ABS Fund, Shalin Shah, to talk about the opportunities in asset-backed securities.

Advertisement