Defined BenefitJun 12 2019

Universities staff threaten more strikes over pensions

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Universities staff threaten more strikes over pensions

The University and College Union is threatening to consult on a strike if universities don’t rule out benefit cuts or contribution increases for members of the Universities Superannuation Scheme.

The union has written to 69 institutions, warning that if they fail to confirm by June 19 that they will limit scheme members' contributions to 8 per cent, or meet the cost of any additional contributions, the union will prepare for an industrial action ballot in September.

After a consultation in 2018 of a new cost-sharing rule, USS members saw their contributions increase by 0.8 percentage points to 8.8 per cent of their salary in April.

Under the same rule, members' contributions are due to rise to 10.4 per cent in October and 11.7 per cent in April 2020.

Employer contributions are also increasing – they are currently at 19.5 per cent and will rise to 24.9 per cent in April 2020.

USS has about 419,000 members across 350 universities in the UK.

Its 2017 valuation estimated the scheme needs an extra £900m a year in contributions from members and employers to continue to offer the current level of benefits in future, and to ensure benefits already earned are funded in full.

USS has a defined benefit as well as a defined contribution section, but was due to become a fully defined contribution fund under plans published in November by Universities UK, which represents the scheme sponsors.

In January 2018, UCU announced 14 days of strikes across 61 universities to start in February and run over a four-week period.

In April 2018, members of the scheme voted to accept proposals which included a guarantee that the DB element of the scheme would be maintained, while a joint-expert panel considers the valuation of the pension fund.

According to the scheme's annual report, it had a deficit of £12.6bn at the end of March 2017, which would be reduced by £6.1bn after the implementation of the Universities UK reform proposals.

UCU is now arguing that USS members "have been frustrated by a lack of progress in the dispute that saw universities brought to standstill last year by unprecedented levels of strikes".

The letter accused universities of failing to exert their influence over USS and allowing it to ignore the key findings of the joint expert panel that was set up to review the scheme.

If implemented in full, the joint expert panel report would have resulted in combined contributions of no higher than 26 per cent – 8 per cent for members.

However, USS has now presented three options – which would see members contributing more than the 8 per cent threshold - all of which fail the union's ‘no detriment’ policy of no increases in contributions and no cuts to benefits, UCU stated.

The union's higher education committee will meet on June 28 to consider the response and next steps in the dispute.

According to Paul Bridge, UCU’s head of higher education, USS members "are running out of patience" and want universities to start acting in their interests.

He said: "Delegates at our recent conference passed a series of motions that clearly articulated their frustrations and set out plans for a September strike ballot if universities refuse to rule out benefit cuts or contribution increases.

"We hope universities will respond positively to our request and we can focus our efforts on addressing concerns over the governance of USS and the need to develop a valuation method that people can have confidence in.

"If universities fail to respond positively then we will have no option but to start planning for a strike ballot."

A Universities UK spokesperson said: "It is clear that a ‘no detriment’ solution where employers and members refuse to pay additional contributions will not be acceptable to the USS trustee or The Pensions Regulator.

"Any refusal to pay the contributions increases already scheduled would be unlawful, and undoubtedly would provoke a legal intervention. This is something employers are not willing to risk.

"We continue to seek a solution to the current valuation that is acceptable to TPR, USS trustee, scheme members and employers."

maria.espadinha@ft.com

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