LUCU News: Pensions Update
Today is April Fools’ Day. It’s also the day when Universities UK’s cuts to USS come into effect. What’s happening to our pension scheme is as ludicrous as the great April Fools’ pranks of the past (spaghetti trees, the island of San Serif), but, unfortunately, not as funny.
As a result of these cuts, the pension you will earn today is between 15% and 35% lower than the pension you earned yesterday. Coupled with the 21/22 pay award of just 1.5% and an inflation rate currently running at 6.2%, the assault on our pensions means that this year will see the biggest cut in our real-terms renumeration since at least the 1970s – potentially the biggest cut ever.
The changes taking effect in USS from today have other implications, too. From now on, the University will be spending around £5.8m per year on servicing the ‘deficit’ that USS calculated existed on 31 March 2020, at the height of the pandemic. In the Trustees’ interim monitoring report of 28 February 2022, USS accepted that this ‘deficit’ had shrunk from £14.1bn to £2.0bn. Remarkably, to create even this trivially small £2.0bn ‘deficit’, USS had to lower its growth assumptions below even the ‘excessively prudent’ assumptions used in the 2020 valuation: USS is now assuming 0% growth in real terms (since 2020 it has achieved 33% growth).
You may need to take a moment for this outrage to sink in. This £5.8m per year is real money, taken from the University’s bank account. So, the next time you are told there is no money to fund your PhD student to attend a conference, no money to replace your faulty computer, or no money to buy a new heater for your cold office, please remember that there is enough money in the University to spend £5.8m servicing a deficit that doesn’t exist.
What now?
There are two immediate ways in which the dispute could be resolved.
First, USS is being taken to court by a group of UCU activists. The hearing is scheduled for 5 April, and you can find out details of the case at the CrowdJustice page.
Second, Universities UK could insist that USS issues a new deficit recovery plan in light of post-valuation experience. Because the current ‘deficit’ is so low, this would be likely to reduce deficit recovery payments to zero, thereby providing scope for devising a new schedule of contributions and higher benefits. Critically, to improve benefits does not require the same lengthy consultation and legal process as is needed when benefits are cut.
To date, Universities UK has refused to call for a new valuation, or for post-valuation experience to be taken into account in drawing up the deficit recovery plan; instead, it has preferred simply to cut staff benefits. Without concerted pressure from UCU members, in the form of a high turnout and a strong ‘yes’ vote in the current ballot for continuing industrial action, UUK will continue to erode our living standards.
Sign the petition
Please urgently join UCU’s call for Universities UK (UUK) to revoke the cuts by signing the petition here: https://speakout.web.ucu.org.uk/uss-cuts-are-not-necessary/
Please vote
The ballot closes a week today: 8 April. We urge you to return your ballot papers, if you have not already done so. The last safe day to post is Wednesday 6 April. Thank you.
LUCU Committee