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UCU response to USS trustee update

3 March 2021

UCU said the Universities Superannuation Scheme (USS) has produced a report that risks endangering a healthy pension scheme. The union was responding to USS's trustee update on the 2020 valuation.

UCU pointed to flaws in the valuation of the scheme, which include USS having an overly pessimistic view of the higher education sector and not taking proper account of its growing asset base.

The union has previously criticised USS for cherry-picking recommendations from a Joint Expert Panel (JEP) which was set up by UCU and employer representative Universities UK after unprecedented levels of strike action over detrimental changes to USS in 2018. The union is not alone in its criticisms of the valuation methodology adopted by USS, with the universities of Oxford and Cambridge also demanding changes to USS's valuation approach.

Despite plummeting member satisfaction levels with USS, its chief executive Bill Galvin saw his salary and benefits rise by almost £30,000 to £486,410 last year and was awarded a £212,009 bonus, more than double what he received in 2019.

UCU general secretary Jo Grady said: 'USS is trying to spin the fundamentally flawed assumptions which its valuation of the pension scheme relies on as objective matters of fact. In doing so it risks endangering a healthy scheme. Problems with USS's methods and assumptions have not been properly addressed despite widespread dissatisfaction among members and criticism from across the pensions industry and the higher education sector, including the universities of Oxford and Cambridge. Universities UK now needs to step up the pressure on USS to change its approach.

'USS's asset base is huge and has doubled in size since 2011, yet it continues to revise assumptions down. The rationale for this remains unclear to many, even those of us closest to the process. It has also proceeded with a valuation date of 31 March 2020, so the value of its assets has been measured during a global pandemic as markets were crashing. The scheme receives more in contributions annually than it pays out, making it able to ride out any bumps.

'USS chief executive Bill Galvin was awarded an eye-watering bonus last year, but USS members who have worked so hard during the pandemic are being told that either contributions have to go up or benefits must go down. After a decade of pay and conditions being degraded, many precarious and low paid higher education workers can no longer afford to be USS members. Even more will quit if contribution rates go up further and this will endanger the health of the scheme as a whole.

'USS and employers must do better. For their part employers need to show higher education staff that their commitment to USS is serious by working with UCU and USS on covenant support measures and to get key aspects of the JEP implemented. UCU will be holding a special sector conference for higher education branches to decide our next steps and cannot rule anything out.'

Last updated: 4 March 2021