Defined Benefit  

University unions reject pension deal

University unions reject pension deal

The University and College Union has rejected a revised proposal to reform their defined benefit pension scheme.

The proposal, which would have come into effect from 1 April 2019 and lasted for three years, would have seen employers and members pay higher contributions into the scheme on a temporary basis.

It had been reached between the leadership of the UCU and Universities UK, the representative organisation of British universities, after a series of strikes across campuses.

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But members of the union voted against the deal, meaning planned strikes over the next few months will continue as planned.

UCU general secretary Sally Hunt said: "Branches made it clear today that they wanted to reject the proposal. UCU's greatest strength is that we are run by and for our members and it is right that members always have the final say.

"The strike action for this week remains on and we will now make detailed preparations for strikes over the assessment and exam period. We want urgent talks with the universities' representatives to try and find a way to get this dispute resolved."

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

It has a DB and a defined contribution (DC) section, but was due to become a full defined contribution fund under plans published in November by UUK, which represents 350 universities.

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.

At the end of January the UCU announced 14 days of strikes across 61 universities to start on 22 February and run over a four-week period.

Last week the UCU announced a further 14 days of strike action designed to hit the exam and assessment periods between April and June.

A Universities UK spokesman said: "It is hugely disappointing that students' education will be further disrupted through continued strike action.

"We have listened to the concerns of university staff and offered to increase employer contributions to ensure that all members would receive meaningful defined benefits.

"Our hope is that UCU can find a way to continue to engage constructively, in the interests of students and those staff who are keen to return to work."

As part of the proposal the employer would have contributed 19.3 per cent of salaries and the member would have contributed of 8.7 per cent throughout the three-year agreement, assuming a deficit recovery contribution of 4.5 per cent, which is subject to consideration by the scheme’s trustee.

Both sides had agreed to maintain a meaningful element of DB, which included:


ACAS talks outcome – to take effect from 1 April 2019

Salary threshold


Accrual rate


DC contributions above the salary threshold

Remain as 12% above the salary threshold

Indexation and revaluation

Capped at CPI up to 2.5% p.a.

Death in Service and Ill-health benefits

Retained as DB on full salary adjusted in line with revised accrual rate

1% match


Investment Management Subsidy

Retained at a cost of 0.1% (as part of the employer contribution)

Meanwhile UCU leadership and UUK had agreed to work together to explore alternative options for the future of the scheme post 2020.

This would have included alternative ways of risk sharing, in particular collective defined contribution (CDC) schemes.