On Friday 13th April, UCU members accepted an offer from UUK regarding their pensions and called off all further strike action this academic year in relation to USS Pensions. This means the further strike days planned for the 23rd-27th April will not go ahead, and no other industrial action is currently being considered.
In January, University staff were facing cuts of up to 40% in their pension. Following strike action they have secured a substantial win. The deal shows the effectiveness of trade unions and Industrial Action, but without the understanding and support of students we would certainly be facing further strike action and staff’s pensions would still be in jeopardy. Your teachers and support staff in the UCU are incredibly grateful to students. We will keep you up to date with any further developments as the expert panel (more below) meets.
How an agreement has been reached:
UCU had roundly rejected some piecemeal offers during the 14 day strike and were preparing for further action to disrupt the examination and marking period. As a result of this pressure, UUK made a further and better offer.
The offer that UCU members have now accepted from UUK is a deal that the two parties will establish a panel of appointed experts, 50% appointed by UCU and 50% appointed by UUK, to re-examine the USS pension valuation using new methodologies. UUK have agreed that the 'work of the [expert] group will reflect the clear wish of staff to have a guaranteed pension comparable with current provision’.
What is a valuation?
Pensions work like this: both the employer and the employee pay money into a pension scheme. This money is then invested to provide interest on the pension pot and increase its value.
As an employee, you are rarely ever paying directly for ‘your pension’ but are paying those of your retired or retiring colleagues, who in-turn have paid for their older generation and so on.
To figure out whether the pension scheme is in deficit, you must examine whether the amount of money being paid in by employer and employees, and the investment returns, is enough to pay the pensions of everybody in it, in let’s say, 50 years’ time. This is called the ‘valuation’.
As a result of people living longer post-retirement, very low interest rates and the volatility of financial markets there is increasing instability in pension schemes. However, the cut in University staff’s pensions was based on a ‘valuation’ of the scheme that assumed that, if every University suddenly went bust tomorrow, and as a result employer contributions stopped, the scheme would be unworkable. This is obviously an absurd assumption to use and UCU consistently argued that this and a range of the other valuation methodologies used were highly pessimistic and politicised. As a result they disputed the proposed cuts to the pension scheme. You can read more here about the complexities of the scheme here.
We are fully aware that your studies and wellbeing have been greatly affected by the industrial action. Today, we have launched a dedicated support UCU - Update offering information on what to do if you have been affected, guidance on getting advice and making complaints to the University.