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A ‘plain English’ history of the current pension dispute

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In April 2017, the USS posted a ‘deficit’ of around £5.1 billion. This in itself did not imply a need for change to the pension scheme. The ‘deficit’ is not an amount of missing money (in fact, the pension scheme funds increased in value in 2016-17 by 20% to around £60 billion) but is instead a calculation of what would be needed in extreme circumstances to ensure payment of all pensions going out now and of those to be paid to people in the future. That calculation makes a set of assumptions about things like future salary levels and stock market growth of assets, so different sets of assumptions can create different results. The 2014 valuation, for example, assumed salary growth of 16% over four years (It has been closer to 6%). The ‘deficit’ is always an intelligent guess of a future amount, not a fixed actual loss in the present day. The USS have an obligation to provide a valuation every three years. But first – before we consider the current situation – a quick look back in history. In 1997 our employers decided to reduce their contributions into pension scheme. From 1983 to 1997, they were paying 18.55% … continue reading

‘An urgent update from the trustee’

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Members will be receiving an ‘urgent update’ from the USS trustee today. We would like to offer some further information on this update. We note that the trustee points out that “we rely on the employers’ collective financial strength and continued existence and ability to support member benefits over multiple decades” but avoids giving you the detail on this. USS’s actual assumption is that sponsoring employers will remain solvent for at least the next twenty years, and, moreover, in sufficient robust financial health that they could increase their employer pensions contributions to up to 25% of payroll (+7% more than the current 18%) for the duration of those twenty years. So, the USS make an assumption of affordability and increase in employer contributions that the employers nonetheless repeatedly deny – they can’t have it both ways. As for the other assumptions they address in this urgent email, The USS and their actuarial advisers, Mercer, did list the assumptions used on page 106 of the most recent Report. In brief, they assume: 1. A fall in the expected long-term nominal investment return from 4.7% to 2.83% pa. 2. An increase in general pay growth in the year following the valuation from … continue reading

Help Us Grow – Recruit a Colleague Today

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As the cuts bite across the public sector, it’s never been more important to build our union. You can help us grow today by emailing your colleagues and asking them to join. Staff in our colleges and universities have never needed their union more. We are a growing union, a campaigning union and a successful union. Every year, around 7,000 members seek help for a problem at work from their local UCU branch. We manage to resolve most of these issues but where we cannot the union’s legal service is there to gain redress. In the past 12 months that redress has amounted to more than £2m in settlements for members treated unfairly at work. We are campaigning hard to defend pensions, jobs and to hold back the privatisation of our education system. The more members we have, the stronger and more successful UCU will be. Circulate this flyer: http://www.ucu.org.uk/media/pdf/h/s/Recruitment_leaflet.pdf and encourage them to join online using this link: https://join.ucu.org.uk/ … continue reading