Staff at up to 61 universities nationwide could strike after talks about the future of the staff pension scheme ended without agreement.
Academic staff are said to feel “utterly betrayed” after the decision to impose changes on the Universities Superannuation Scheme – the pension scheme for academic staff at 350 universities.
Proposals have been put forward to transform the scheme from defined benefit to defined contribution.
Sally Hunt, UCU general secretary, said: “We are disappointed at how talks ended. Universities must be on notice that unless there are dramatic changes in their negotiators’ position then strike action will be arriving on campus next month.”
The union said it would firm up the start dates for a series of strikes next month following a ballot in which members overwhelmingly backed strike action.
Members at seven universities failed to meet the 50 per cent turnout threshold and will be balloted again.
The transforming of the USS has been proposed after the cost of its future defined pension benefit obligations leapt by a third since 2014.
The Joint Negotiating Committee, which decides changes to the scheme, wants plans put in place to tackle its rising deficit and mounting costs.
But following a series of meetings to discuss USS reform with UCU a negotiated settlement could not be found.
"The UCU proposal which was tabled today would have increased financial contributions to unmanageable levels for employers and many employees – UCU proposed an increase of 35 per cent in member contributions to get lower pensions benefits and increasing employers' contributions by c£500m a year," a Universities UK spokesperson said.
"Employer contributions have already risen by 30% over the last decade and further increases are not affordable."
Employers will now hold a consultation with all members - expected to run for 60 days from mid-late March - on the possible impact of these changes on individuals. Any changes would not come into force until 1 April 2019.
Deficits are a common problem facing large defined benefit pension schemes. According to PwC’s Skyval index the deficit of DB pension funds increased to £450bn at the end of November 2017.
Donald Maxwell-Scott, technical investment manager at Rowan Dartington, said: “Pension deficits are presenting more of a threat to a company’s health, with as many as one in ten FTSE firms struggling with a ballooning deficit.
"The reason for this is a combination of record low interest rates, subsequent low bond yields and a rising life expectancy.”
According to Universities UK, the USS reform proposal will see the scheme offer "market leading" defined contribution benefits on all salaries, with a commitment to consider whether defined benefits can be re-introduced if funding conditions improve in three years’ time.
Scheme members will be able to choose from a range of funds to invest in and employers will cover the cost of investment charges.
There is also an option for members to pay contributions of 4 per cent rather than 8 per cent of their salary, while still benefiting from an employer contribution of 18 per cent.
USS will also continue to offer life assurance and ill-health benefits.
A Universities UK spokesman added: “The reform proposal will tackle the scheme’s deficit so that universities can continue to offer attractive pensions to staff.”
