You might be concerned to learn that the university has refused to consult meaningfully with the local UCU branch on the matter of USS pensions. They have told us that they are content to back the UUK position and the shocking intergenerational unfairness that this will imply, with younger colleagues standing potentially to lose more than 40% of the value of their income in retirement compared to colleagues closer to retirement.
With yesterday’s CPI inflation figure being reported at a thirty-year-high of 5.4%, and with our university agreeing with the UUK when they now insist that pension accrual should no longer increase with inflation when it is over 2.5%, we can all of us see that detriment to our pension is guaranteed if the situation is not soon resolved. As that inflation cap has a cumulative effect, it impacts on younger colleagues more. Do note that even if this was the only change that UUK brought to the structure of our pensions, it could cost individuals tens of thousands of pounds over the course of their retirement. When I say ‘individuals’ I mean you. The question to ask now is whether you are willing to accept that unnecessary loss to your income, and all that it will imply for your family, or whether you will be prepared to back the forthcoming strike and action short of a strike to the letter and, alongside your colleagues, try to bring the UUK back to the negotiating table before their damaging and unnecessary measures are imposed. We have only a matter of weeks.
At the same time as hearing that inflation rose to its highest level since 1992, we also learned that the value of the assets of the pension stand now at £92.2bn. This is a £15.4bn higher than the valuation of March 2020 being used to justify UUK’s changes. Please remember that the forecast for the assets that the USS used to calculate a ‘deficit’ assumed that the assets will not reach their current £92bn level until the middle of the next century. In fact, even the 2011 USS valuation – which was used to argue for the end of the final salary scheme – did not predict this actual level of asset value in 2022. When you strike, you are striking to oppose this preposterous valuation and support your union in demanding a reasonable valuation performed using pension industry standards and sensible metrics based on the actual, verifiable value of the scheme.
I want to close with two sets of facts. Firstly, this illustration has been put together by a physicist in Edinburgh using the USS’s own modeller producing a graph of total loss in pension in retirement between age 66-86 based on the UUK proposals. The image here is for cpi inflation at 2.5% and shows that the reduction in total pension, for example, is between 100k and 200k for people born around 1990. With cpi at 3.5% it’s between 100k and 300k. (Reminder: cpi is currently 5.4%). This is essentially a graph mapping intergenerational unfairness.
Please remember, these are not UCU figures, but outputs from the USS modeller. They demonstrate starkly the impact of the UUK proposals, which are supported by our university management. By contrast, please see this statement from the university management at Imperial College, jointly with their UCU branch.
The second fact I want to leave you with is something that has not gained so much attention, but is important for those whose salaries are high enough to already be paying into the defined contribution element of the hybrid USS scheme. UUK’s cuts are worst on earnings between £40k and £60k, second worst on earnings between £0 and £40k, and have the least impact on salaries over £60k. See this blog (in particular para IIb) for detail.
Have a good weekend.
Pension representative for University of Leeds UCU
This post is from an email sent to branch members on 21 January 2022 by Mark Taylor-Batty, committee lead on pensions, on behalf of the committee.
This page was last updated on 26 January 2022