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EGM – Wednesday 21 January

Thanks to all the members who attend the EGM yesterday to discuss the revised USS proposals.

Our departmental representative in History, Joan Tumblety, has very helpfully written her own personal notes of the meeting that we share here.

 

Summary

The meeting was chaired by Denis Nicole of the local branch executive committee. He started by outlining the UCU’s Higher Education Committee’s agreed bargaining position in early November 2014. This included a push for:

  • 1/70th accrual rate in a career related benefits (CRB) scheme for all members, including those in the career average scheme who have joined since 2011, cf. the initial USS proposal’s push for 1/80th
  • The removal of the Defined Contribution element (in the initial USS proposal to be imposed on all salary over £40 000)
  • Increased employer contributions for future pensions (to 18.1%) cf. the former 14-16%

DN pointed out that the current USS revised proposals show movement in all these areas: they include a 1/75th accrual rate, an increase in the cap on earnings before the DC element kicks in (£55,000), and increased employer contributions (in the current proposals 18% on income up to £55,000, although only 12% on income above that cap). Although the current proposals would still give USS members a less good pension deal than the Teachers’ Pension Scheme (TPS), accepting them would have the advantage of ensuring an improvement for those members in the post-2011 career average scheme on what they have at present; and it would also abolish the current two-tier USS system, which is divisive and would arguably weaken any UCU negotiating position in future disputes. DN made it clear that he thought that this is as far as the employers and USS representatives will go at this point, and that members should probably vote to accept these proposals. He did emphasise that this advice represents his personal opinion.

DN also explained that the current round of reforms of the USS pension scheme was triggered by the most recent three-yearly mandatory review (USS has a legal obligation to The Pensions Regulator to conduct such things). Crucially, the review has taken place in a post-financial crash climate in which The Pensions Regulator (which is accountable to the Treasury) is keen to limit the potential risk to government of pension schemes that fail. In this climate, defined benefit pension schemes (like the current USS pension) are deemed inappropriate, risky and old-fashioned, and defined contribution schemes (like the one about to be imposed on all USS pension members) are preferred. In short, the DC scheme involves the shifting of risk away from the pension fund trustees (and ultimately government) and onto the individual (i.e. you and me).

 

Reflection and Q&A

One of the key points about the current reform proposals is precisely that the pension accrued on salary above the cap (the proposed £55,000) will be placed in a fund that will eventually pay out according to how successful its investment strategy has been. It seems that there is still quite a bit of uncertainty as to how the DC funds will be managed, how much individual members will have control over their own pot, and what kind of fees they will entail for members (in the Netherlands such DC funds are apparently quite costly to manage and the fees fall on individual members).

My understanding is that voting to accept the current USS proposals would establish the principle of a direct contribution model in lieu of a direct benefits one. This is a considerable sacrifice. But it isn’t clear to me what the UCU ‘bottom line’ would be if the industrial action resumes from 29 January, and whether it includes a total rejection of the DC element or merely negotiation over the cap.

There was much discussion about what could be achieved if the ballot resulted in a rejection of the current proposals. I think there was a mood in the room that carrying out further action short of a strike in a period when – for many – marking season is drawing to a close, may be fruitless. In the event of ineffective action short of a strike, it seems likely that the improved USS proposals would be withdrawn and we would be in a worse situation all round. There was some suggestion that UCU nationally might continue to think of more effective means of strike action anyway, action that can be carried out by all members (not just those who teach and who happen to have marking duties at any given moment). Perhaps the biggest strategic problem at present is that the employers – who have in many instances including our own been like-minded with the UCU position, at least in some respects – are not the biggest threat to our pensions. That means that taking industrial action against them doesn’t hit the real target – the USS trustees, The Pensions Regulator, and ultimately ideological support for the kind of de-mutualisation of which this recent shift to the de-risking of pension schemes is but one lamentable example. So what kinds of (non-strike) action might be employed to gain leverage against these foes – demonstrating outside banks? Seeking judicial review? Threatening legal action? As you can imagine, there was no definitive answer to this question…

In any case, voting in the UCU ballot is crucial, and if you are not inclined to take part in a protracted industrial dispute that would probably involve indefinite strike action, my advice is to vote to accept the proposals.

More information:

USS and employer statements (with a USS pension modeller) are here: https://isoton.wordpress.com/2015/01/20/potential-joint-proposal-on-pensions-uss-reform/

UCU pension modeller with links to other pages is here: http://defenduss.web.ucu.org.uk/whats-my-pension/

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