As we approach industrial action, we thought it would be useful – from a pensions perspective – to post Mark Taylor-Batty’s August email to all USS members at Leeds, following the most up to date funding position at that time:
An important and predicted change to the funding position of your USS pension was announced yesterday. The latest monitoring report published by USS indicates that the scheme is now in SURPLUS and no longer in deficit. This means in effect that the scheme holds enough value in its assets to honour all the future pensions accrued to date.
We might anticipate that UUK and some of its member University leaders will try to spin this as a consequence of the recent April cuts to your future pension income. This misrepresentation has begun at some universities. If we were to remove the recent changes, and return to the position before they came in, it is clear that future pensions would still be 100% funded. No, the benefit cuts have not brought about this improvement, but the shift in market position, starting from the point of an obtuse insistence on the part of USS of holding a valuation in 2020 at the nadir of the post-covid market crash. The following diagram maps this development out accurately, charting the difference in the value of the fund with or without the April 2022 benefit cuts.
We should note that this surplus has been calculated following USS’s own means of calculating asset value, which we and at times UUK have heavily criticised as being ‘excessively prudent’ (assuming very bad future performance or inhibitors to performance).
What does this mean for your pension? We are now in a position where we can in theory return the lost benefits to USS members. At present, each month around 6% of your salary is currently going to pay for a deficit that does not exist, and this is at the cost of setting that money aside for your own income in retirement. This should be reversible.
There is a risk that UUK, and some Universities, will seek to profit from the improved position and argue that we can now reduce costs – the money they and you pay in to the pension. A cynical position would be that, knowing that such an improvement was clearly evidenced in the December and January monitoring positions, the UUK promoted the loss of our benefits in January so that they might exploit the predicted bounce back in asset value in order to cuts costs to member universities. Now, certainly, we would all like to see our pension contributions drop to where they was before April, or below that, and the UCU position is to pursue this once we have first recovered lost benefit (i.e. returned to you the tens or even hundreds of thousands of pounds of your future income in retirement lost to the recent unnecessary cuts).
Earlier this year, in a joint statement made by the University of Leeds and the local UCU branch, the University here committed to prioritising the return of benefits over the reduction of contributions. This statement was the arbitrating factor that brought the UCU’s effective boycott of assessment to an end. There is no reason at present to believe that the Vice-Chancellor will not honour that position, and respond to UUK surveys of members on this matter with that prioritisation. I would nonetheless be cautious to watch now for communications that foregrounded the reduction of contributions as a primary goal.
The UCU is soon going into a period of balloting for resumed industrial action, and from the perspective of the pension, this will be to seek to keep the return of your pension income on the agenda.
Professor Mark Taylor-Batty
University of Leeds UCU pensions Officer
Member of the USS JNC
This email comes from the UCU pensions officer at the University of Leeds. UCU represents all members of the USS scheme, regardless of UCU membership. As such, the University recognises we have the right to contact all staff in that constituency. Apologies if this causes any inconvenience for non-UCU or non-USS members.
This page was last updated on 16 November 2022