Vote Yes to Reverse the Pensions Cuts
Please vote in the industrial action ballot, if you haven't already. This message is primarily about the pensions issue, and there will be other messages on the other issues.
UCU is now calling for:
UUK to revoke the massive cuts which they imposed on members of the USS pension scheme and put pressure on USS to restore benefits to 2021 levels as soon as possible.
UUK to put strong pressure on USS to ensure that the next and all subsequent valuations are moderately prudent and evidence-based.
(The pension issue involves not just our union UCU and the employers' association UUK, but also the pension company USS.)
In the upcoming year, there will be another valuation of the USS pension fund, which will likely show that the pension is in surplus. Our employers will likely use this as an opportunity to argue for reducing the amount they pay in contributions into USS instead of focusing on restoring benefits to staff.
Last April major cuts to the pension were imposed. The accrual rate was cut from 1/75 to 1/85, the Defined Benefit/Defined Contribution threshold was lowered from £59,884 to £40,000, contributions were increased from 9.6% of salary to 9.8% of salary, and it was decided that pension benefits accrued after 2025 will not be indexed to inflation when CPI inflation goes above 2.5%.
The cuts imposed last year were not necessary, and it is affordable to reverse the cuts.
Under pressure from our negotiators, USS has released Financial Monitoring Plans which indicate the pension fund is now in surplus, and our negotiators have calculated from this that the pension would be in surplus even without the latest cuts.
UCU has consistently said the deficit used to justify the latest round of cuts resulted from valuing the pension on an unrepresentative date of 2020 March 31 and using an excessively pessimistic (or prudent) methodology. The employers' actuaries had agreed (see https://www.ussemployers.org.uk/sites/default/files/field/attachemnt/USS%2031%20March%202020%20valuation%20-%20Aon%20report%209April2021.pdf page 19).
Our senior executive response to the initial proposal called the latest round of cuts "a step in the right direction"
(see https://www.ed.ac.uk/sites/default/files/atoms/files/uoe-uss-consultation-response-final.pdf page 12).
Our vice-chancellor has refused to sign the Cambridge/Oxford/Imperial joint statement calling for investigating conditional benefits/indexation as a long-term solution to the cycle of cuts in USS. Our management also refused to agree what was agreed at Glasgow that "any upside arising from the next scheduled valuation of the scheme’s assets and liabilities should be used to improve member benefits and not to reduce employer or employee contribution rates from current levels".
We can win real changes. The latest figures indicate the pension would be in surplus even without the last round of cuts, so improvements are affordable.
The triennial valuation is this year. We stopped employers from moving our pension to a 100% defined contribution scheme in 2018. Even last year, USS had to delay the the lowered inflation cap until 2025.
I hope you will join me in voting yes, but, most importantly, please vote in the ballot.
Best wishes,
Pieter Blue
