Post from email sent to branch members by pensions rep Mark Taylor-Batty on 25 February 2022

On 23 February, the University of Leeds posted its position on the ‘UCU proposal (sic.) to conclude the USS 2020 valuation’ on the internal ‘For Staff’ webs pages. 

It offers a summary written by the Pension Committee of the University Council, which “endorsed a number of the concerns raised by UUK in relation to the UCU proposal, including: 

• A lack of clarity (including from a legal perspective) about the grounds on which UCU believes the 2022 valuation it proposes would deliver a more favourable outcome to the 2020 valuation, given the regulatory and economic realities under which the new valuation would take place. 
• A lack of clarity about the specific arrangements were the proposed 2022 valuation to require contributions which exceed a combined employer/member contribution of 35% of salary – the cap proposed by UCU, which would itself require endorsement by the JNC, USS and the Pension Regulator. 
• A challenging timetable – UUK has raised questions about the time it would take to conclude a 2022 valuation and the impact of this.”

Before I respond to these, I should let members know that there was no consultation at all with the UCU on this matter here at this University, unlike at other Universities. The answers to all these things were available, and indeed had already been presented at a national level to UUK. It is disappointing that our University proceeded in this matter on this position of seeming declared ignorance, or failed to challenge UUK misrepresentations communicated to the University. I shall outline the responses that were already available, and mostly already in the public domain:

• A lack of clarity (including from a legal perspective) about the grounds on which UCU believes the 2022 valuation it proposes would deliver a more favourable outcome to the 2020 valuation, given the regulatory and economic realities under which the new valuation would take place. 

The USS Trustee themselves published interim calculations that very clearly indicated that the deficit has reduced to a negligible amount. That is to say, calculated on almost the same basis* as the 2020 valuation, current interim valuations have indicated that a 2022 valuation would be much more favourable. On 21 February, the day before JNC, the USS published an update on the funding position:

“At the end of December 2021, assets were valued at £92.2bn (£0.9bn lower [than November]), the implied TP deficit stood at £2.6bn (£4.2bn lower [than November]) and the new benefit structure could require contributions of 27.5% of pay (1.2% less).

At the end of January 2022, assets were valued at £89.3bn (£2.9bn lower), the implied TP deficit stood at £2.9bn (£0.3bn higher) and the new benefit structure could require contributions of 25.8% of pay (1.7% less).”

Please note that although these statisticss were published on 21 February they were made available by the USS Trustees to Universities in the week on 14 February.

*I write ‘on almost the same basis’ above because in recent presentations of interim valuations, the USS have ratcheted up yet further the already high prudence employed in the 2020 valuation. UCU negotiator Sam Marsh sums this up in a thread of last week, notably 4. In brief: in their 2020 calculations of future service costs, they allowed for out-performance assumptions. They have removed these in the monitoring data for interim valuations, which increases rates. UUK could easily challenge this. 

I am unsure what is meant by ‘from a legal perspective’ in the University’s response, but there is no regulatory inhibition to a March 2022 valuation, and to further consultation on the back of it, and the USS themselves have agreed this. 

• A lack of clarity about the specific arrangements were the proposed 2022 valuation to require contributions which exceed a combined employer/member contribution of 35% of salary – the cap proposed by UCU, which would itself require endorsement by the JNC, USS and the Pension Regulator. 

It is simply untrue that there was a lack of clarity provided by UCU to UUK. UCU negotiator Mike Otsuka provided them with all the detail, and published these details for all to read here. The USS have deemed the proposals ‘viable and implementable’, and this assessment would have taken account of the Regulator’s assumed position. 

• A challenging timetable – UUK has raised questions about the time it would take to conclude a 2022 valuation and the impact of this.

UUK knew perfectly well that recent history indicates that the timetable is feasible. And, again, UCU negotiators gave UUK all the information they needed on this. There are two recent precedents: Firstly, the 31 March 2017 valuation was originally scheduled for release for formal consultation at the end of June 2017. A draft of the valuation was released at around that time, which was very similar to the valuation that was released for formal consultation in early September. The time interval between the end of June and 1 April 2023 is 9 months. Secondly, the 31 March 2018 valuation was released for formal consultation on 2 January 2019. The schedule of contributions for that valuation was signed on 16 September 2019–8.5 months later. If, moreover, a statutory minimum 60-day consultation is required in order to implement listed changes involving cuts to benefits by 1 April 2023, there would be time for this, so long as JNC approves these changes by the end of September 2022. It is only if the consultation period is extended to about 75 days as the most recent one was that an earlier deadline might be necessary. Such an end-of-September deadline for JNC approval is facilitated by the third of our proposals. The agreement between the two sides on 25.2% and 9.8% caps on the employer and member contribution significantly narrows the potential for disagreement between the two sides on the specification of benefits and contributions and the time that needs to be allocated for resolution of these disagreements.

What we see here in the University’s published response, regrettably, is a public declaration by the University that they have not tried to find answers that were available to very simple issues, and have not sought to seek any understanding of them from UCU locally or nationally, and have instead supported a cut of 35% of guaranteed income to the average USS member at Leeds, instead of supporting UCU proposals that would have cost Leeds no more than £3.4m in the coming year, and feasibly led to a reduction in our and the institutions contributions, at no cost to our pensions in retirement. This is a multi-million pound decision (in cost to us) taken by members of the University governing body, and seemingly done so on the basis of the above flawed assumptions.

I remain available to the University for consultation and clarification as the UCU takes its next steps on this issue.

Mark Taylor-Batty 

This page was last updated on 25 February 2022