Defined Benefit  

University staff backs strike over pensions

University staff backs strike over pensions

The majority of staff at UK universities has backed industrial action over plans to scrap their defined benefit (DB) pension scheme.

The current fund, Universities Superannuation Scheme (USS), is the largest private sector pension in the country.

It has a DB and a defined contribution (DC) section, but would become a full defined contribution fund, according to plans revealed on in November by Universities UK, which represents 350 university employers.

Article continues after advert

Some 88 per cent of University and College Union (UCU) members who voted backed strike action and 93 per cent backed action short of a strike, with a turnout of 58 per cent, the trade union for higher education staff said.

Due to this result, 61 universities across the country could face widespread disruption next month, UCU added.

USS covers the majority of staff mainly in the older "pre-1992 universities" including Oxford, Cambridge, Manchester and Imperial.

There have been concerns about the scheme's £12.6bn deficit, with employers and members warned they may need to increase contributions by up to 7 per cent to maintain their current benefits.

But this is beyond what universities are willing to pay and Frank Field, chairman of the work and pensions select committee, has written to ministers, The Pensions Regulator and the trustees of the scheme to understand why its deficit has increased £7.3bn in three years.

UCU has argued that a DC scheme could lead to a final pension worth only around 20 per cent of the "best" DB schemes.

An analysis recently conducted by First Actuarial, which compared the pension of a lecturer starting work today under the new proposals for the scheme, concluded that staff could be £200,000 worse off in retirement.

Michael Otsuka, a professor at London School of Economics (LSE), has argued the scheme closure could leave staff with only half of their retirement income.

UCU general secretary Sally Hunt said: “UCU members have made it quite clear that they are prepared to take sustained strike action to defend their pensions.

“USS already offers worse benefits than other schemes available in universities, and UUK's proposals would make matters worse. I hope more vice-chancellors will pressure their negotiators to work with us to resolve the matter without strike action.”

The union is now planning an industrial action strategy in case talks with Universities UK, scheduled to end tomorrow (23 January), fail to deliver a solution.

maria.espadinha@ft.com