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Experts latest to criticise universities for use of dodgy statistics in pensions row

23 October 2014

Universities have once again been accused of using misleading information in a row about changes to the Universities Superannuation Scheme (USS) - the pension scheme for staff at 69 UK universities.

A group of statisticians and mathematicians have criticised universities for picking and choosing the information they use in areas such as salary assumptions, retirement ages and life expectancy in a briefing on the pension changes.

UCU said the universities' representatives should put scare stories and dodgy statistics to one side and focus on negotiating. On Monday staff at the 69 affected universities overwhelmingly backed plans for strike action and an assessment boycott.

UCU said universities, esteemed academics and the union had now all criticised the employers' questionable briefings and it was time for them to focus on negotiation, rather than a campaign of misinformation.

In response to a briefing document by the Employers Pension Forum (EPF), the statisticians and mathematicians* said the assumptions used in the document contained 'misinformation and a mistake' and were not adequately justified.

They pointed out that the predicted salary increases in the document assumed a buoyant economy, while investment returns assumed a recession. The experts pointed out the assumptions on mortality have not changed since 2011, yet EPF said that scheme members living longer is a reason for deterioration in the fund since 2011.

This is not the first time EPF has been criticised for misinformation regarding life expectancy. A previous EPF Q&A also claimed the reason for the radical changes to USS was that people were living much longer in retirement. In that briefing EPF argued that in 1974 people were expected to live for just 6-8 years in retirement, but people are now expected to live for 30 years in retirement.

However, for that to be true life expectancy for USS members in 1974 would have been just half that of the general public and 1.6 times greater now. When a UCU member wrote to EPF to point this out, the figures disappeared from question nine of the original briefing. However, both the original answer with the dodgy figures and the updated versions were captured and can be seen here and here.

Last week Oxford University voiced its concerns about the employers' use of figures. It said modelling by Universities UK (UUK) - the universities' umbrella group who helped found EPF - was misleading as it assumed no promotion or incremental salary increases.

UCU general secretary, Sally Hunt, said: 'Every week seems to bring yet more revelations that the employers are playing fast and loose with statistics to try and back up their position. Universities and esteemed academics have now had to speak out against their campaign of misinformation.

'Staff have made it quite clear that they are prepared to take industrial action to defend their pensions. The employers should be focused on that, not producing dodgy briefings.'

Modelling by First Actuarial for UCU suggests some staff could lose as much £200,000 from their pensions under the plans. Similar work carried out by pensions consultants Barnett Waddingham for Times Higher Education suggests that some academics would lose about £20,000 a year in retirement income if the changes goes ahead.

* Saul Jacka, professor of statistics, University of Warwick
Peter Green FRS, professor emeritus of statistics, University of Bristol
Steven Haberman FIA, dean, Cass Business School
Jane Hutton, department of statistics, University of Warwick
John Aston, professor of statistics, University of Cambridge
Sir David Spiegelhalter FRS, Winton professor of the public understanding of risk, University of Cambridge
Charles Taylor, professor of statistics, University of Leeds
Simon Wood, professor of statistics, University of Bath
Qiwei Yao, professor of statistics, London School of Economics
Michalis Zervos, professor of mathematics, London School of Economics

Last updated: 10 December 2015