USS employers to be consulted on UCU proposals

Universities Superannuation Scheme (USS) employers are being consulted on University and College Union's (UCU) proposed changes to the scheme, after the USS trustees confirmed that these proposals were viable.

Amid forthcoming strike action, UCU recently published a number of proposed changes to the USS as an alternative to the proposals from Universities UK (UUK), after concerns that UUK's changes could result in a '35 per cent cut' to member's guaranteed retirement income.

Whilst USS Employers had previously argued that the proposals don't appear "to be a serious attempt to reach agreement", UUK chief executive, Alistair Jarvis, also wrote to UCU general secretary, Jo Grady, to confirm that, if the scheme trustee validated the proposal, UUK would consult employers on it.

This includes consulting on whether the covenant support levels assumed can be relied upon.

USS trustees have now confirmed that there is “no impediment to implementation” of the alternative proposals, with Grady therefore arguing that “UUK must now urgently consult employers and seek their agreement”.

She stated: “Time is running out to protect pension benefits and avert widespread industrial action which is due to start on Monday. Vice chancellors must not waste this golden opportunity.

“UCU’s proposals reflect the views of a majority scheme members who responded to the USS consultation and will prevent devastating cuts whilst providing room for a new evidence-based valuation.

“The excessive prudence of the 2020 valuation has already shown itself to be wrong and any changes to the scheme need to be based on a more realistic view. UCU members know that when employers say they can’t afford pension contributions, what they are really saying is that they don’t value their staff.

“The ball remains firmly in the court of Universities UK and vice chancellors. They must do the right thing.”

A spokesperson for USS Employers has since acknowledged that the costings confirmed by the USS trustee now allow for a formal consultation with employers on UCU’s proposals, confirming that this commenced yesterday (10 February).

The consultation will gather employer views on whether they will provide the necessary covenant support, including their willingness to pay an additional c£200m annually from April 2022, an extra £330m from this October 2022 – and ultimately c£700m more each year from April 2024 – on top of the current USS pensions cost of around £2bn per annum.

However, USS Employers also emphasised the potential impact of these costs, arguing that, by proposing such high costs, UCU is "asking employers to put pensions before other university priorities including the student experience, pay, and the jobs of its members".

A USS Employers spokesperson stated: “To date, employers have given a clear message throughout this valuation that the current contribution rates are at the limits of both affordability and sustainability – and paying more would have a significant and detrimental impact on the sector’s collective ability to delivering high quality education and research.

“An additional £200m is equivalent to nearly 5,200 full-time roles across the university sector.

“We continue to meet regularly with UCU to try to find an affordable and viable solution to this valuation by the end of this month to prevent the introduction of damagingly high costs for both employers and scheme members.”

USS Employers also recently launched a consultation with sponsoring employers of the USS on a potential modification to its own proposals, after the member consultation revealed member concerns over the 2.5 per cent cap on inflationary increases.

However, UCU has written to USS chief executive, Bill Galvin, to call for the full results of the recent consultation of scheme members to be made public "as a matter of urgency", suggesting that a "significant majority" of members may have voted in favour of increasing contributions of members and employers in order to protect benefits.

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