USS and further industrial action

In an email sent to members she wrote: 'Many of you have seen the disturbing allegations against our USS pension scheme which were recently reported in the Financial Times. They are credible and they require an immediate response.

We are heading towards another round of industrial action, because employers are refusing to cover the cost of the extra contributions which USS has demanded. As members, you deserve to know about the controversy surrounding those extra contributions, and our employers' role in it.'

She went on to explain that while the Pensions Regulator is investigating USS, employers are turning a blind eye: 'One of UCU's appointees to the USS trustee board, Professor Jane Hutton, has accused (£) USS of preventing her from accessing crucial information about the USS valuation. She believes that the USS deficit may have been "substantially overestimated". At the same time, evidence has been uncovered (£) that USS misrepresented the views of the Pensions Regulator regarding investment risk in the course of its current, 2018 valuation. USS is under investigation by the regulator and the Financial Reporting Council. 

'This matters to all of us. USS's deficit, and its claims about the regulator, were USS's main justifications for rejecting some of the most important recommendations of the Joint Expert Panel.

'UCU members forced our employers to establish the panel after taking industrial action last year. The panel's first report vindicated our belief that USS had an affordable, sustainable future. It confirmed that we were right to go on strike.

'Our employers' response has been deeply disappointing. Reacting to the Financial Times's reporting, Universities UK (UUK) declared that they were "confident that the USS trustee board is conducting business in line with its fiduciary responsibilities".'

Instead of holding USS to account, she said, employers are willing to make us pay more and more for the same pension: 'The panel's initial recommendations to USS were modest and compliant with regulations. If USS had applied them all to its 2018 valuation, our dispute could have been resolved. The outcome would be what UCU members call 'no detriment': no contribution increases or benefit cuts for members. Total contributions would be no higher than 26%, as they were before this dispute started. But instead, USS is proposing rates well above 30%, climbing as high as 34.7% after 2020. 

'As a replacement for the rate of 35.6% that is already being imposed on employers and members after USS's highly controversial 2017 valuation, this is far from satisfactory - especially when we have already sacrificed millions of pounds in pay deductions for going on strike, and it was the employers' proposal to end defined benefit that caused the dispute and led to these increases.

'Despite the fact that employers can agree to pay all contribution increases over 26%, they have decided to force us to pay a large proportion of them. If we let this happen, our contributions are set to go up to at least 9.6% of salary from this October, and at least 11% after 2020, compared with 8% if the Joint Expert Panel's recommendations were implemented now.

'Worse still, employers have given us no assurances that they will pay to protect our benefits if USS continues to demand higher contributions in the next valuation cycle. They may even return to their original proposal to end the guaranteed, Defined Benefit element of USS.'

She ended by saying that if employers won't negotiate or commit to reforming USS, we must be ready to go on strike: 'Enough is enough. UCU's Congress has voted to ballot, starting in September, for industrial action, unless employers hold USS to account - or cover the cost of failing to do so. 

'The Joint Expert Panel issues a second report in September. This time it is set to address longer-term issues involving USS's governance and valuation methodology. Employers' responses to the first report have shown that they will not put pressure on USS to implement either report unless we provide a credible threat of strike action.

'We achieved something unprecedented with our action last year, by forcing our employers to revoke their attempted closure of the scheme and establish the Joint Expert Panel. 

'We can finish what we started, and convince our employers that their interests are the same as ours. USS has a sustainable future if it is governed properly.'

She urged members to write to their employers, either individually or a UCU branch, to ask if they really do have full confidence in USS - and what they intend to do about it if not.