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'Seize the moment' and 'revoke pension cuts', vice chancellors told as trustee reveals vast improvement in scheme's finances

31 March 2022

UCU today demanded vice-chancellors order their employer body UUK to revoke brutal cuts to pensions after a drastic improvement to the USS finances was revealed by the trustee.

Under pension proposals, set to come into force tomorrow (Friday) and supported by vice-chancellors and UUK, the typical staff member is set to lose 35% from their guaranteed retirement income. Employers say this is justified after a deficit was reported in the scheme when it was last valued in March 2020 as markets were crashing due to the pandemic.

However, this week a new report by the trustee which manages the scheme, has reported assets increasing to over £88bn. The trustee says that growth has outstripped liabilities and that the level of contributions required to service the deficit - has now fallen to 0%.

Now, in light of the information provided by the trustee, the union has formally requested that university employer representative Universities UK (UUK) urgently revokes its cuts. UUK can do so by instructing USS, the chair of the Joint Negotiating Committee (JNC), the forum where pension matters are negotiated between employers and staff representatives, and UCU's lead negotiators. UUK has so far refused with the employer body saying it needs a mandate from vice-chancellors to do so.

In letters to the UUK's chief executive and its negotiators, UCU reiterates its call for support for its compromise proposals which will protect pension benefits whilst a new valuation of the scheme is carried out. The latest financial monitoring report provided by the scheme's trustee confirms that the new valuation conducted at this point of time would result in the deficit tumbling by more than 85%. UCU is also helping its members write to vice-chancellors urging them to instruct UUK to revoke the cuts. The union is also asking members of the USS pension scheme to sign an emergency petition calling on the JNC chair to support the UCU's position.

At a meeting of the JNC in February employers voted to implement their package of cuts and against a new valuation date that would recognise the improvement to the scheme's finances. JNC chair Judith Fish used her deciding vote to vote through the plans, breaking a deadlock between employers and UCU. UCU is now urging the chair to acknowledge that the cuts are no longer needed with the scheme performing so healthily.

Staff are furious at employer proposals to cut pensions and have been on strike over the last two weeks. In a UCU report into staff wellbeing published last week it was revealed that three fifths are considering leaving UK higher education over cuts to USS pensions.

Industrial ballots also opened at 149 universities this month, including at most of the universities facing strike action. They will run until Friday 8 April. Successful ballots would pave the way for action to continue to be called throughout the remainder of 2022, including action short of strike, such as a marking and assessment boycott. This could stop hundreds of thousands of students from graduating.

UCU general secretary Jo Grady said: 'University staff have known all along that these pension cuts are unjust, unnecessary and premised on a deeply flawed valuation conducted in the middle of the pandemic. Today they have been vindicated.

'The strong performance of the pension scheme has seen its assets reach unprecedented levels with growth now outstripping liabilities. Vice-chancellors must now seize the moment, revoke these cuts and end the industrial strife which has so far seen universities hit by up to 18 days of strike action. A failure to do so will put rocket boosters onto our campaign to get the vote during the final week of industrial ballots.

'By accepting the latest financial report from the trustee, accepting UCU's compromise proposals and agreeing to a new valuation, employers can not only protect the benefits of staff but ensure they don't waste money closing a deficit that no longer exists.

'If vice-chancellors instead choose to rely on a flawed valuation, conducted in March 2020 whilst markets crashed due to Covid, and use it to slash employee benefits then questions must be asked about why they are ideologically committed to harming their staff, even when doing so harms the university's own finances.'

Last updated: 31 March 2022