The USS Dispute
How does USS (Universities Superannuation Scheme) currently work?
Under current rules, USS members pay 8.8% of their salaries into the scheme. The contributions were increased in April from 8% and are due to rise to 10.4% this October and 11.4% in April 2020 in order to plug the deficit. This will see a typical lecturer on a £45,000 a year salary paying £1,000 a year more for the same pension on retirement.
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What’s the dispute over pensions contributions?
The dispute over USS stems from planned increases for employee contributions to the scheme to make up an estimated deficit. This means that university staff would have to pay more in, because the scheme was at risk of running out of funds if everyone drew their pension. This is because the scheme is a defined-benefit pension scheme, meaning that all members of the pension will be paid a defined proportion of their final salary, so it needs to have a lot of funding behind it to be able to pay everyone what they are owed.
The Trustees of the scheme estimated in July 2017 that there was a £7.5bn deficit in the scheme’s finances, based on its position on 31st March 2017. This was immediately challenged by UCU, as it was an estimate which they did not agree was accurate.
In response to this, a proposal was put forward by Universities UK (UUK) and accepted by USS. The proposal recommended that all contributions moved to a defined contribution model. This would mean that the scheme would be cheaper to run, as it wouldn’t be based on predicting how much money would be needed to cover members’ final salaries. UCU claimed that this would result in retirement income falling across all members, with some groups seeing very significant losses.
What happened before?
UCU engaged in 14 days of strikes, supported by students, in 2018 to defend their pensions and said it was only fair that any cost this time around should be shouldered by the employers. The employers dropped the proposal to move to defined contribution following this and it was agreed that the joint expert panel would be set up to review the 2017 valuation, as UCU believed it to be inaccurate. This panel is made up of people nominated by UCU and by UUK, with an independent chair.
The panel concluded in September 2018 that the scheme’s finances were not as disastrous as had previously been predicted. It decided members would be able to keep their defined benefit pensions at a cheaper cost of 29.2% of a member’s salary, to be made up by employer and employee contributions, rather than the 36.6% previously proposed by USS to address the deficit. Despite support from UCU and UUK the trustees did not implement this.
USS launched a fresh valuation in January which halved the deficit to £3.6bn. But they still proposed contribution increases above the panel’s recommendations.
At a meeting of the USS Joint Negotiating Committee (JNC) in August, the universities' proposals -that will see members pay 9.6% of their salary into their USS pension, compared to 8.8% at present and 8% before the strikes, with further hikes planned from 2021 - were backed by the chair Sir Andrew Cubie.
UCU tabled its own proposals to the JNC setting out why universities should meet any additional costs. The Union previously wrote to universities in June and warned that if they did not agree to limit members' contributions to 8%, or meet the cost of any additional contributions, then they faced the risk of a strike action ballot. UCU General Secretary Jo Grady has said that the union have no desire to take strike action that would see members miss out on pay and that employers still have time to avert this.
Pay, workloads, casualisation and equality
Alongside the USS ballot, UCU are holding a ballot on whether to launch industrial action on pay, workloads, casualisation and equality. More information about USS can be found below, however as not all institutions are USS members, the Pay, Workloads, Casualisation and Equality ballot will affect a broader range of providers.
The pay offer in 2018/19 for the majority of HE staff was yet another below inflation increase. The value of UCU members’ pay has declined and continues to fall. Since 2009, the cumulative loss to pay (compared to rises in RPI) is over 20%, therefore they are demanding that employers increase staff pay by 3% plus RPI. This is both a ‘keep up’ and ‘catch up’ proposal.
UNISON’s 2018 survey of members in higher education found that 71% of members said their workload had increased in the past year. 64% said that they were either ‘Very Concerned’ or ‘Concerned’ about workload and unsurprisingly, 63.5% said that they were either ‘Very Concerned’ or ‘Concerned’ about work related stress. UCU believes this must urgently be addressed and are calling on institutions to limit unsafe and excessive workloads.
Casualisation has become an increasing problem in higher education, with staff in insecure work without good reward schemes and training. Most universities continue to use hourly paid contracts for some teaching staff, and most universities rely on external contractors to deliver some part of their own services. UCU are calling this ballot to ensure that employers reduce the number of zero-hours and hourly paid positions.
UCU are asking for a nationally-agreed action for HE institutions to close the gender pay gap and to specifically address the racialised pay gap, taking account of the ways in which intersectionality affects pay and grading. Every year, the official pay data in UK higher education shows continuing and persistent pay inequality, which needs to be urgently addressed.