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June 27th, 2019:

USS update

If you attended the AGM earlier this month, you will already know that there is going to be a ballot for further strike action this Autumn. The UCU position is one of No Detriment, and the decision to ballot for strike was proposed and accepted at Congress earlier this summer. In April, our pension contributions increased from 8% to 8.8%. The current proposals from USS will increase the total contributions of employers and scheme members by at least a further 1.4%, with our member contributions rising by at least 1.3% since the start of the dispute. If the employers do not agree additional contingent contributions, the increases will be even worse.USS is proposing rates that will increase our contributions to at least 11% after 2020.

Industrial action by UCU members led to the establishment of a Joint Expert Panel last year, comprising both UCU and UUK representatives. The Panel confirmed UCU’s belief that the pension scheme has a sustainable future, and made reasonable recommendations to USS. If applied, these recommendations would have resolved our dispute and would have resulted in no contribution increases or benefit cuts for members. Our employers however, instead of committing fully to the Joint Expert Panel recommendations, are proposing we should increase our contributions based on a pessimistic valuation of the scheme.

And a story came to light in the last week (featured in USS briefs on twitter and in the FT) that the Chair of USS trustees (David Eastwood) was rebuked by the Pension’s Regulator (tPR) for misrepresenting the tPR position on an issue key to that valuation. Currently VC of Birmingham University, David Eastwood was told in January that the USS report mistakenly suggested that the tPR insisted on using the most cautious of discount rates, which resulted in a larger projected deficit. Despite an email on the subject, he and the board have done nothing to correct their statements or acknowledge the potential impact on the valuation of the scheme. We also have to wonder what the effect on the negotiations would have been had this been made public to all parties at the time. You will also have seen this in UCU General Secretary elect Jo Grady’s most recent email (from Monday 24thJune).

This follows reports that a USS trustee (statistics expert Professor Jane Hutton) claims to have been prevented from carrying out a full analysis of the scheme valuation.

A further complication to the debate is the decision (confirmed 20thJune) of Trinity College, Cambridge to withdraw from USS – on the grounds that there was a remote risk that its assets would be required to bail out the scheme in a worst-case scenario. UCU has already called for a boycott of Trinity College – as outlined in the brief from Head Office on the 21stJune.

To keep up to date with USS developments you could follow FT journalist Josephine Cumbo on Twitter or visit the UCU USS pages.