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Lecturers to be balloted in two-tier pensions row

10 May 2010 | last updated: 11 December 2015

Members of UCU who pay into the Universities Superannuation Scheme (USS) pension will be asked to vote in a consultative ballot on proposed changes to the scheme.

The vote will run from today and the result will be announced at the union's annual congress at the end of the month. The union said it cannot rule out the possibility of industrial action should the employers try to force changes to the pension scheme.

The union says that the employers' proposals to change the scheme are unacceptable and will leave members considerably out of pocket. UCU says it accepts some changes are needed in order to ensure the stability of the fund and protect members' benefits. However, the union is annoyed that its attempts to put forward proposals to safeguard the scheme have been rejected.
The union thinks the employers are using current rhetoric about being tough on pensions to talk up a pensions crisis in the sector. UCU says that evidence shows the USS scheme is not about to collapse nor is it in dire straits. The union says that a typical new starter could lose £127,000 if forced onto a careers average scheme, rather than the final salary scheme in place for current staff.
Working from the evidence available of what the scheme needed, UCU proposed a modest increase in employee contributions, along with an increased retirement age for new entrants and a cost sharing mechanism should future increases be required.

The employers rejected the union's proposals and said they want to introduce the career average earnings scheme instead of the final salary scheme.  

UCU says that staff see their pensions package as deferred pay and points to the fact that universities themselves recognise the importance of the USS pension. In a 2007 pensions report, the British Universities Financial Directors' Group warned that:
'There is some feeling... that public sector pension rights are unduly generous, and that there is scope to contain their net cost by e.g. limiting indexation rights. This has to be set in context. Narrowly viewed, HE employee pension contribution rates are higher than those of many private sector schemes. More broadly, any pension advantage which there might be must be set against the comparatively modest salary levels in HE, particularly for academic staff. Notwithstanding recent and impending increases in salary rates, HE pensions are based on modest salaries by comparison with alternative competing professional occupations, and it is ostrich-like to pretend otherwise.'

UCU general secretary, Sally Hunt, said: 'Our members have long seen pension as deferred pay and an important part of their remuneration package. Universities have been warned what changing the scheme would do for recruitment and retention of staff and have accepted that the decent pension scheme is some compensation for comparatively low pay.
'We do not accept the argument that because pension schemes have taken a bit of a battering elsewhere that we should join a race to the bottom. The union is not sticking its head in the sand, and we have made affordable proposals which would protect benefits for all but unfortunately the employers seem determined to create a two-tier system which would damage recruitment and retention of university staff and lead inevitably to a further attempt to reduce benefits for existing staff to the lowest common denominator."
'The employers' response to our goodwill has been to suggest proposals that will undermine one of the most secure schemes in the country. Universities themselves have recognised the likely damage changes to the scheme will do and we are now asking our members involved with the USS scheme for their view on the employers' proposals. We cannot rule out the possibility of industrial action to protect our members' pensions if the employers continue with their intransigent position.'
A full Q&A on the changes can be found here - USS changes - key questions - which includes further details on the difference for a new starter on the career average scheme, compared to the final salary scheme.