University vice-chancellor warns proposed changes to USS could have ‘serious consequences’

The proposed changes to the Universities Superannuation Scheme (USS) would have “serious consequences” for affected universities, University of Warwick vice-chancellor, Professor Stuart Croft has urged.

In a blog post written to university staff, Croft noted that “alternative, more innovative solutions” should be explored regarding the USS and called for reforms including the possibility of government backing for the scheme to be explored to ensure that the USS remains competitive.

The professor acknowledged that “more attractive schemes” are in place in the sector, such as the Teachers’ Pension Scheme which is available in the post-’92 sector.

Furthermore, Croft critiques the USS’ “conservative approach” and asked for the process by which the valuation of the scheme has been made to be clarified.

Croft also suggest that the termination of the defined benefit scheme “will require USS’ investment strategy to become increasingly cautious,” as it may negatively impact the scheme’s future growth.

The professor’s intervention preludes the University and College Union’s member ballot for industrial action over changes to the USS. The ballot opens tomorrow Wednesday 29 November and will close on Friday 19 January. The union said that comments made have shown that employers’ opinions on USS reform are divided and that there is a shared concern about the proposed changes.

UCU general secretary Sally Hunt commented: “Professor Croft is right to highlight the hugely damaging impact which ending the DB scheme would have on both universities and their staff. These plans would remove members’ security in retirement and leave them facing years of uncertainty about whether their pensions will be sufficient to live on.

“This important intervention confirms our belief that the proposals from Universities UK do not have support from across the sector. While divisions in the employer position are beginning to show, UCU is united as we fight to defend our members’ pensions.

“We all want to avoid widespread disruption on campuses, but universities must be under no illusion that their staff will take industrial action to defend their pensions. I would urge all members to back the action in the ballot.”

The current plans from Universities UK will see guaranteed pension benefits from the DB scheme to be replaced by a defined contribution scheme where benefits may be variable.

Last month university lecturers in the University and College Union (UCU) voted in favour of industrial action to protect their pensions.

According to the UCU, 87 per cent of members who voted in the consultative ballot, which closed yesterday 18 October 2017, said they supported taking industrial action to defend their existing pension benefits in the Universities Superannuation Scheme (USS).

The union has noted that USS benefits have fallen behind those available for members of the Teachers' Pension Scheme and although universities have the ability to pay extra in order to safeguard existing benefits, members have said they will not at present.

    Share Story:

Recent Stories

Sustainable investing for DC schemes
Laura Blows discusses sustainable investing for defined contribution plans with BlackRock head of UK & MEA global consultant relations, Claire Felgate, in Pensions Age’s latest video interview

Spotlight on Emerging Markets
Francesca Fabrizi talks emerging markets with Polar Capital’s head of Emerging Markets & Asia, Jorry Nøddekær, exploring the opportunities for pension funds in the current global setting

Sustainable Investing
Laura Blows speaks to Royal London Asset Management sustainable fund manager, George Crowdy, about global sustainable equity investing
The latest in multi-asset credit
Laura Blows discusses the high-yield market and multi asset credit with Royal London Asset Management senior fund manager, Khuram Sharih