UCU has submitted a claim to end the gender pay gap at the university of Leeds. You can see the full claim at http://www.leedsucu.org.uk/wp-content/uploads/2018/09/Gender_Pay_Claim.pdf
Yesterday, the long-awaited report from the Joint Expert Panel was released.
The report very much validates many of the arguments that UCU and activists have been rehearsing over the last year. Given the fact that the Panel was made up half of employer representatives and half of UCU representatives, it is perhaps notable that the conclusion are more in line with what UCU and First Actuarial have been arguing for many years than the statements we have seen from employers.
UCU responded yesterday by saying that the report represents “a significant landmark in our ongoing campaign to defend members’ pensions.”
Some key aspects of the report
The JEP considered the manner in which the USS trustees use the ‘three tests’ to weigh up the affordability of contributions, and conclude that “too much weight” has been given to the long-controversial ‘Test 1’ which was now acting as a ‘constraint’ on benefit design and investment strategy, rather than guiding those decisions.
The Panel state that USS had not given enough weight to the fact that our pension scheme is a large, cash-flow positive scheme and that the ’strength and diversity’ of the Higher Education sector was not always fully taken into consideration. Had the trustees and employers given these factors greater weight, the Panel argue, they should have been able to agree a less restrictive attitude toward risk.
Specifically, the way the trustees had applied the employers’ ‘risk appetite’ using ‘Test 1’ had contributed to the ‘strong risk aversion’ we saw arise last year.
Speaking of the Pension Regulator, the JEP state that it appears to have approached the valuation without taking full account of the specificities of the USS such as the long-term nature of the scheme and its ‘immaturity’ (more coming in than going out).
The Panel was critical of the ‘framing and context’ of consultation questions put to employers in 2017, and how these informed ‘misleading results’ ending with an outcome that seemed ‘inconsistent with many employers’ wishes’.
“The Panel believes that there are a number of different paths that the Trustee could adopt to reduce the contribution rate to below 30%” while maintaining the Defined Benefit status quo (and the Defined Contribution status quo but without the 1% match).
The unanimous recommendations of the panel
- A re-evaluation of the employers’ attitude to risk, which would result in a re-evaluation of the reliance on the sponsor covenant.
- Adopting a greater consistency of approach between the 2014 and 2017 valuations, which affects the scale and timing of deficit recovery contributions.
- Ensuring fairness and equality between generations of scheme members by smoothing future service contributions.
- Ensuring the valuation uses the most recently available information which means taking account of recent market improvements, new investment considerations and the latest data on mortality, for example.
Implications and next steps
In short, if these recommendations might be followed to the letter, our pension benefits as they are might be retained, with only some small detriment (the loss of the 1% employer match) for a small increased contribution to the scheme. On the usual basis of cost sharing, we might expect an increased employee contribution of 1% on these grounds.
All of this is now still to be agreed. While this very strong validation – which directs criticisms at USS, tPR and UUK, but not at UCU – is causing optimism around the sector, we still now rely on the mechanisms of negotiation between UCU and UUK to finalise the matter of the 2017 valuation, upon which any change to our contributions and to our pensions in retirement now lie. In the meantime, the USS is obliged to continue to assume the increases in contributions to start in 2019, as previously announced. That can be overturned, and something near the status quo might prove to be the consequence of our dispute, but this report in itself does not signal a victory or end to the dispute.
The USS joint expert panel has published its report this afternoon.
The joint expert panel was set up by UCU and Universities UK to try to establish a common understanding about the health of the USS pension scheme because UCU believed the proposal to end the defined-benefit pension scheme was based on a flawed evaluation.
The report has been welcomed by both UCU national officers and Universities UK which represents the employers, as a basis for resuming talks on the pension scheme. Link to national UCU response
We’ll publish a local response once UCU committee members have had a chance to read and digest the full report.
Members will have received communications recently from the University and from UCU about the USS’s consultation over proposed changes to our pension. The consultation is a requirement upon USS, and was originally deferred as a result of the outcome of the dispute earlier this year, when it was originally scheduled for June.
One of the important proposals that caused members to vote to freeze our dispute earlier this year, was the creation of the Joint Expert Panel (JEP) that would look into the pension valuation. We therefore don’t recommend that members respond to the USS consultation until the JEP reports. Leeds UCU will be in touch with members again once we have considered the implications of that report, with some recommended responses to the consultation.
Members who want begin to consider responding to the consultation, or wish to do so before the JEP reports, might wish first to read the recent UCU briefing for members on this issue. And perhaps read Sheffield UCU’s commentary on Twitter here. The questions asked in the consultation cover:
- The removal of the 1% match
- Proposals over contributions above the salary threshold
- Increased contributions shared 35:65 between members and employees respectively
- The size of contribution increases under the cost sharing rule
- Any other comments
Recent new insightful and informative contributions to the discussion around the USS pension include:
An article by Michael Otsuka considering the University of London’s SAUL pension scheme, which is identical in structure and investment context to USS, yet running a surplus for lower contributions.
A twitter thread by National USS negotiator Sam Marsh (University of Sheffield) who demonstrates from USS’s own statistics that our ‘deficit’ is a direct product of de-risking (cancel the de-risking and the scheme would be in £11Bn surplus)
In relation to that last thread, you may be interested to sign a petition calling for full transparency from USS
A recent article in the Times Higher (by the former governor of the Bank of England and a prominent economist / investment officer of an Oxford college) which debunks the ‘deficit’ and says that the USS is perfectly healthy (unpaywalled version here). Sam Marsh focusses on choice aspects of that article here.
You might also wish to go to the University’s consultation on 20th September and ask questions that arise from your reading of these recent revelations.
The strike ballot opened 30 August and will close Friday 19 October.
The union’s national and local committees are both urging members to vote YES for both strike action and action short of a strike up to and including a marking and assessment boycott.
To strike we will need to get the 50 percent turnout required by the Tories’ anti-strike law, while the law forbids us from using methods which would make that easier such as secure online voting or workplace ballot boxes. So union reps and members will be reminding everyone to vote throughout this period to make sure we’re not prevented by a biased law from taking action if members want to.
Please make sure the details on your My UCU account are up to date.
If you haven’t received your ballot paper please check My UCU to see which address you asked it to be sent to. If you haven’t received it there or you can’t get to that address please follow this link to request a replacement ballot paper.
Please tell us when you’ve voted
We’re emailing all @leedsucu members eligible to vote a unique link to tell us when you’ve voted (or that you don’t want any individual reminders). Please click on that link when you’ve voted, but not until your ballot paper is in the post box!
This will help us to focus our reminders on members who have yet to vote, or who don’t wish to disclose whether they’ve voted. We’re not asking how you voted (though the national and local committees are recommending members vote YES and YES).