Category Archives: News

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Letter to our Surrey UCU members

Dear all,

We are writing our last letter before strike action, and this time the letter is to you, our Surrey UCU members. We were very sorry not to receive a response from Professor Lu himself to our last open letter, but instead a response from the Head of HR that left many of our questions unanswered. In particular, we feel that it is unfortunate that:

– We have no specific response for our members who will not receive a UK state pension and for whom we believe that the current Aon modelling, promoted by UUK, is misleading

– That we have no explanation as to why it is thought appropriate, given the different valuations of the USS pension, that UUK supported one set of figures to discredit the current scheme whilst using another to support the projected modelling of their proposal.

In addition to this, in terms of the current formal consultation, it would be positive to receive confirmation that University of Surrey is listening to its staff members. The UCU Ballot result was announced on the 22nd January, the day before the final JNC meeting. This was the biggest mandate that UCU had ever received, and nationally we even reached the double threshold imposed on public service unions, that not only 50% of members vote, but that 50% of members vote Yes.  We know of at least one University that reacted instantly to this strong message from their staff members and ‘conference called’ into a UUK Employers Pension Forum stating they were now keen to find a middle ground. UCU members have made it very clear what they think of the current proposal.

You will hopefully have seen the email sent round by Sally Hunt yesterday detailing the Universities that have supported UCU and openly called for further negotiations. These institutions include Loughborough, Goldsmiths, Glasgow, Warwick, Birkbeck, Strathclyde, and London School of Tropical Hygiene and Medicine. We have previously circulated the call for more time and more negotiations from the Sheffield VC.

Please do not miss this statement now issued by the Vice Chancellor at Essex, Anthony Forster, who unequivocally supports the rights of staff to retain the
defined benefit pension in a spirit of ‘principled compromise’. It is incredibly heartening, given the huge changes being proposed by UUK, that a statement stressing the importance of duty of care to staff members has been released by a VC at this time.

A huge amount of positive press has been generated supporting UCU. Please do not miss the front page of the TIMES today – it really is a show down piece: https://www.thetimes.co.uk/edition/news/university-strike-puts-final-exams-in-danger-l27b9x7vn

To return to University of Surrey and recent statements, we were concerned to read, within the Head of HR’s response to our Open Letter, that PwC is advising the USS trustees. We know that PwC have been involved in a huge restructuring process in a nearby University which cost £36 million, and which resulted, when you look at the University accounts, in a subsequent rise in staff costs. The ability of consultancy firms like PwC to extract millions of pounds from public institutions for extremely dubious results is outlined in the BBC documentary Who’s Spending Britain’s Billions (there is about 15 minutes just on PwC!) Please find the documentary here: https://www.youtube.com/watch?v=00UFYU_Gr7w

This is also related to our request to Professor Lu about discussion on the priorities of the University. We are concerned that the value of staff is being sidelined. Up and down the country, Universities have embarked on huge projects, turning their campuses into building sites and ambitiously creating overseas campuses. We are concerned that at any point where finances need to be reviewed, cutting staff costs is the first option on the list.

On a positive note, however, in terms of local news, USSU have provided information on strike action on their website, and beforehand they asked both sides to contribute a statement. You can find the information supplied, including the UCU view, here: https://www.ussu.co.uk/support/Pages/Strike.aspx

We are proud to have established a constructive dialogue with USSU, Unite and Unison in the lead up to strike action. We are cc’ing USSU, Unison and Unite into this member letter, not as a sign that we expect them to agree on all points of our position, but to show our commitment to communication during this dispute. We would also welcome a return to open dialogue with Professor Lu.

As we now enter the last few days, we advise all members, and students, to write to the VC, asking for the details that we have not yet received. In relation to his assurance:

This is why I and the Executive Board have been supporting the attempts being made by all parties to reach a mutually agreeable outcome in the pension discussions, but the outcome must be one that is affordable for institutions.

We asked:

We are very pleased to hear that yourself and the Executive Board have been supporting the attempts being made by all parties to reach a mutually agreeable outcome in the pension discussions. It would be a great comfort to our members, and to staff members here at University of Surrey generally, to hear how this support has manifested itself, and what actions you have taken to further a mutually agreeable outcome which is unfortunately not yet in sight.

We wish only to add, as a last point, that it is important to remember that we are not taking action alone, but our Branch is part of a huge movement involving 61 other HE institutions.

Surrey UCU is not alone.

See you on the pickets.

The Surrey UCU Committee

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Open letter to Professor Lu from the Surrey UCU Committee about the USS dispute

Thank you for your detailed and courteous response to our Open Letter dated 26th January. We appreciate the time you have taken to explain your stance within UUK when representing the interests of your staff at University of Surrey who are members of the USS pension. We agree with you that this is indeed a very complicated and serious issue.

Due to the urgency of the situation we feel a responsibility to our Surrey UCU members, at this critical stage, to request further information on the following points:

We understand that the valuation that you reference when claiming that the scheme is currently in deficit is contained within the USS consultation document (‘2017 Actuarial Valuation: A consultation with Universities UK on the proposed assumptions for the scheme’s technical provisions and statement of funding principles’). As you will be aware, UCU strongly contested the methodology of this valuation and commissioned actuarial advice which was published in September 2017: https://www.ucu.org.uk/media/8705/Progressing-the-valuation-of-the-USS-First-Actuarial-Sep17/pdf/firstactuarial_progressing-valuation-uss_sep17.pdf

The conclusions of this document were:

The current employers’ contribution rate of 18% of pensionable pay, of which 15.1% goes towards defined benefits, is prudent. The asset income which is required, in addition to contributions, to pay the benefits in 2 www.ucu.org.uk full is low. Indeed, in a scenario of “best estimate” pay rises, the benefits of the USS can very nearly be paid from contributions, without reliance on the assets. We can be very confident that the scheme is not vulnerable to forced disinvestment.

We can be very confident that the cash flow in will meet benefit outgo for the very long term, so in the mean time fluctuations of market value or the pension scheme’s balance sheet are of low importance…The USS does not have negative net cash flow and is not likely to have in future (subject to dealing with increasing longevity, as already noted). Cash and short dated investments are not needed to meet net outgo and to protect against forced disinvestment. Unfortunately, we understand that UUK insisted on supporting the original USS valuation. It is with consternation, then, that we witness UUK promoting the Aon modelling of the current proposal, as the Aon modelling uses higher, more optimistic estimates than those previously used by USS. Can you please explain to us whether you yourself believe this to be inconsistent, and also could you please explain why UUK have not subsequently called on USS to use these more optimistic figures when valuating the current scheme?

An additional concern with the Aon modelling (additional to the fact that in every single example, the projected annual pension income, for any group, is significantly less than it would be on the current basis) is that it contains the assumption of a state pension. We note that the current individual modelling that USS members can access does not include the state pension. Can you please state whether you believe this to be misleading as including a state pension superficially reduces the impact of the proposed changes? Can you also state whether you have voiced concern within UUK on behalf of your staff members who will not receive a UK state pension and for whom current example projections should have been modified?

You have stated that employers are not looking to reduce their payments and that these proposed changes are in line with leading UK organisations. We note that staff members in industry can earn much higher wages than staff in the HE sector and that traditionally, the security of the pension was a pay-off that attracted potential employees into academia. This is all the more important as the uncertainty surrounding Brexit continues, raising issues such as HE staff recruitment and retention.

We express our regret at your claim that there is no time for further negotiations to take place, especially since UCU are urgently calling for further negotiations in order to avert strike action. We hope that you will explore every possibility to continue the talks on behalf of your staff here at the University of Surrey. Please consider the approach and action taken by the VC at Sheffield:

I wanted you to know that my position is that all sides of the national debate should continue to talk, to explore the problem and the potential solutions and to seek a way forward which satisfies all parties. Given disagreements about the value of the USS fund at the heart of these issues, I would support calls for the Pensions Regulator or another agreed third party to independently value USS against international benchmarks of similar schemes. I hope this may allow some crucial time and the ability for all to return to the table.

https://www.sheffield.ac.uk/polopoly_fs/1.760854!/file/letter.pdf 3

www.ucu.org.uk In contrast to this approach, suggesting that your staff members engage with consultation rather than take part in industrial action whilst also implying that, not to go with the new proposals will cause ‘significant’ staff cuts, is a punitive tone that we had hoped University of Surrey had moved away from. We would therefore welcome a dialogue which openly discusses the priorities of the University, with the three recognised trade unions and USSU.

We are very pleased to hear that yourself and the Executive Board have been supporting the attempts being made by all parties to reach a mutually agreeable outcome in the pension discussions. It would be a great comfort to our members, and to staff members here at University of Surrey generally, to hear how this support has manifested itself, and what actions you have taken to further a mutually agreeable outcome which is unfortunately not yet in sight.

We would also like to add that we will be sharing this open letter with our Surrey UCU membership alongside your previous response in a spirit of transparency. We thank you again for engaging with Surrey UCU at this extremely critical point in the USS dispute.

Kind regards

The Surrey UCU Committee

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Pension Questions

We have received the following member questions which our National UCU Pensions Official has answered:

1. Employer contributions are only guaranteed until March 2020 and they are proposing to extend this to March 2023. Once the University is no longer liable for the pensions, they can easily decrease their contributions in the future. Why is this not being extended indefinitely or at least for some very large amount of time like 50 years?

The University part of the USS which is a last man standing scheme which means all the liabilities of the scheme (past service accrued) are owned by all of the universities in the scheme and if an institutions failed then others would pick up the bill. Employer contributions in any scheme are reviewed each valuation i.e. every three years so a promise of 18% until 2023 is a long time normally it would be for 3 years. It wouldn’t be for a very long time because that would be assuming that the funding would require that and we can’t look that far ahead on future funding. Hopefully the economic conditions means they can reduce their contributions and therefore we can. It is a 65/35 distribution.

2.In the “A valuable DC” it says that 13.25% of the salary will go to the defined contribution pension. However, 18% is being contributed by the University on behalf of us. Where is the 4.75% going? If any of this is used to pay for someone else’s benefit that I am not entitled to, I think this is unacceptable. If we are truly switching to a defined contribution pension then it’s every man/woman for themselves.

They will always be liable for the past service by law so now a set amount of that will go to pay for the past service pot (accrued Defined Benefits), then there is a subsidy towards member charges, then remember the death in service and ill health will still be defined benefit thankfully and there is admin costs. It is a lot to come out of less than 5%. Remember under law the employer only has to pay 3% in total from 2019 when changes will happen.

3.Is there any way that another entity, not USS, can be chosen to manage the defined contribution portion of our pension? After all of the changes I do not trust them to correctly manage our money and I am worried that they will use money earmarked for our defined contribution pensions to pay off a defined benefit pension.

No this is in theory a temporary measure and in theory the defined benefit salary cap can move up again. It is up to the employers which schemes they go into. You can opt out and put your money elsewhere but the employer would not put any money in. The deficit and change are due to the way schemes are valued and market conditions not mismanagement.

 Remember that post ’92 institutions are in the Teachers’ pension scheme which is very good. Employers think no-one will move across to these institutions but perhaps members will be tempted.

 

News, Posts, Uncategorized

UCU announces 14 strike dates at 61 universities in pensions row

Strikes will begin on Thursday 22 February

UCU has written to the 61 universities* to inform them of an escalating wave of strikes over a four-week period that will begin with a five-day walkout either side of a weekend. There will then be four days of strikes from Monday 5 – Thursday 8 March and a full five-day walkout the following week (12 – 16 March). The strike dates are:

Week one – Thursday 22 and Friday 23 February (two days)

Week two – Monday 26, Tuesday 27 and Wednesday 28 February (three days)

Week three – Monday 5, Tuesday 6, Wednesday 7 and Thursday 8 March (four days)

Week four – Monday 12, Tuesday 13, Wednesday 14, Thursday 15 and Friday 16 March (five days)

Surrey UCU reached the 50% turn out threshold and will be participating in strike action.

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Formal letter of thanks to University of Surrey Students’ Union from Surrey UCU

 

Dear Saskia,
The Surrey UCU Committee would like to express formal thanks for the USSU response to our open letter re USS. In return, the Surrey UCU Committee remains committed to an open and frank dialogue with USSU throughout the USS pension campaign, up to, and including, any potential industrial action taken.
In particular, we warmly welcome the position and action outlined in the USSU motion and within your opening statement on behalf of the USSU Executive Committee. We also share your commitment to a ‘swift, mutually-agreed outcome’ to this dispute.
Kind regards
Surrey UCU Committee
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Open letter to USSU from Surrey UCU re USS

Dear University of Surrey Students’ Union

You may not be aware that there is a formal UCU Ballot taking place at the moment, UCU members are voting on whether to take strike action, or action short of a strike. This ballot runs until 19th January and is a response to the drastic proposal that the employers (UUK) have made on staff pensions (USS).

UUK are proposing to change the pension from a guaranteed return (defined benefits scheme ) to a gamble on the stock market at the point of retirement (defined contribution scheme), and this is especially concerning for early career academics who have not accrued defined benefits over a long career. If UCU allow this to happen, university graduates also entering academia as employees will inherit a very poor deal.  UCU members also have significant concerns over the claim that the current scheme is in deficit, a claim only generated by a valuation which assumes that the entire HE sector will end on an unspecified date, and that no new University staff will therefore be paying in to the USS scheme.

We are aware that the employers are divided on this proposal, and that the VCs at Warwick and Glasgow are supporting guaranteed pensions and UCU:

The VC at Warwick states that he is ‘mystified’ at the stance taken by UUK:

http://blogs.warwick.ac.uk/execteam/entry/which_way_forward/

The University of Glasgow has stated that it would prefer to keep a Defined Benefits Scheme and ‘The University believes that its interests are aligned with those of the UCU and that all parties should work together constructively to identify a solution. It is, of course, for members of UCU to decide how they vote in the ballot.’

https://www.gla.ac.uk/myglasgow/news/headline_561539_en.html

As the University of Surrey Member of UUK, the VC here has not revealed his stance. If you would like more clarification on this issue, do please take the time to support your lecturers and write to him requesting this information. Your support would be much appreciated and it may help turn the tide on this dispute. UCU are of course hoping that negotiations will become more productive and no action will therefore be necessary. Your support could make all the difference.

Thank you

 
Surrey UCU Committee
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More USS FAQ answered:

 
1. What is the impact of the employers’ proposals on staff?
Taking like for like, the proposal to end guaranteed pension payments would mean a loss more than £200,000 over the course of a retirement for a typical member of staff. While it is impossible to be precise about the impact because your pension would be subject to the performance of the stock market, the independent analysis produced for UCU uses the market predictions made by USS itself. It showed substantial losses for all fourteen different staff profiles that were tested, mostly in the range of between 20 and 40%.
2. The employers proposed this – have they published any analysis?
UUK have finally published an analysis of the impact of their proposals produced by Aon. Their headline is that for current members, retirement income losses will range between 10 and 20%. However, their analysis includes your state pension and this has the effect of superficially reducing the impact. The analysis also does not use the USS market predictions, preferring a more upbeat assessment from Aon and this also superficially reduces the loss. Even on this very favourable (to the employers) basis, it is worth noting that for a typical new starter there would be a 25% reduction in the estimated annual benefits provided by USS. You can read the employers’ analysis here.
3. Whose figures should I trust?
The analysis independently produced for UCU is based on the market estimates made by USS itself. Our analysis does not include aspects which are beyond the scope of USS such as the state pension. While any market estimates are subject to error, it is odd that the employers have chosen not to use USS data for this exercise when they have based their claims that current pensions are unsustainable upon them. One surprising aspect of the recent publication of UUK’s analysis is that the employers clearly had not done any modelling of the impact on members of their proposals before they tabled them on 13 November.
4. Can you explain the significance of 18 December.
The Pensions Regulator (tPR) says that USS must have resolved its issues by 30 June 2018. USS have said that to achieve this deadline, negotiations need to conclude by 18 December. UUK have also said that they will not negotiate beyond this point. UCU disagrees with this. We believe that this is a serious issues for thousands of staff and that negotiations which will affect people’s retirements must not be rushed. We have called for negotiations to be extended and for USS to flex its own internal deadlines to allow this. We have also met tPR and were pleased that in a letter sent to UUK this week tPR said that while they expect adherence to the statutory deadline of 30 June 2018 ‘we are mindful that in complex and late stage negotiations some slippage in timelines can lead to better outcomes.’
5. Are there any negotiations at the moment and what is UCU saying to the employers?
UCU is meeting the employers this week. While we have challenged the valuation methodology used by USS, our main current priority is to defend the principle of the guaranteed pension – what is called a ‘defined benefit’. We are challenging the employers on their assertion that they will not pay more to support USS, even though their expenditure on staff as a proportion of expenditure has fallen massively in recent years. UCU is modelling a range of outcomes to see which are best for members and we will make counter proposals at the appropriate point but we will not be drawn into a public game on the employers’ terms which in effect would accept that your pensions have to fall substantially.
6. Can the employers really afford to pay more?
An analysis carried out for USS in 2017 concluded that “most employers could afford an increase in contributions from the current 18% of pensionable salary to 21%, albeit not without changes to business plans and/or prioritisation of pension contributions. Many would also be able to afford up to 25%.” UCU believes that in addition to providing financial security for staff, USS is also a powerful recruitment and retention tool and is worth investing in – not least because the rival Teachers Pension Scheme already offers substantially better benefits.
7. What are the prospects for a breakthrough?
 
UCU will keep playing a constructive part in negotiations but we must all prepare ourselves for the eventuality that on 18 December the employers will walk away from talks and the current proposal will be imposed.
8. What happens next if the proposal is imposed?
UCU’s current ballot is about your employer’s failure to reach an agreement with us to protect your pension benefits. In the event of imposition, we will seek such agreements with each USS employer. We are very determined to achieve justice for you but our ability to achieve this will depend on UCU’s ballot result. If we win the ballots, we will launch the most sustained campaign of industrial action seen in universities until your employers agree with us how they can make good your pension losses.
9. Why does the union need a 50% turnout in the ballot?
The 2016 Trade Union Act states that without a 50% turnout, unions cannot take action even if 100% of members who vote, want to strike. It is unfair and designed to make it hard for unions to defend members so whatever your views please use your vote.
10. I haven’t received a ballot paper and have ordered a replacement which hasn’t arrived yet. What should I do?
Don’t panic – the union is committed to ensuring that everyone who wants to vote, can vote. Electoral Reform Services (ERS) sends out replacement ballots regularly. Because this is a legal ballot, in a few cases where information provided is incomplete, they are not able to send a replacement. On Monday 8 January, we will issue a widely publicised final call to every member who does not have a ballot paper to claim a replacement. If you have not received a ballot paper by then, please order one at that point.
11. I ordered a replacement ballot paper and then found my original – what should I do?
Use one of the ballot papers to vote. Discard the others. If you vote twice in error, don’t worry. Only your first vote received by ERS will be counted.
12. Can I join the union and get a vote?
Yes. If you join on or up to 12 January, we will ask ERS to send you a ballot paper.
13. What kind of strike action is UCU proposing in the New Year?
 
UCU believes that only sustained strike action will move the employers significantly. We are proposing nationally coordinated action initially aimed at shutting down lectures and classes, including a refusal to reschedule any lost due to strikes, throughout February. Further action beyond that point may also be needed. The union is trying to be honest with you about what it will take to defend your pension and if you deliver the mandate we will make sure the action takes place.
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USS Joint Negotiating Committee update

The USS Joint Negotiating Committee meeting has continued today after a full day of discussions yesterday.  After threatening to impose the proposal on the 18th December,  negotiations will continue now till 23 January, meaning the negotiation team has won a small battle. A decision will not be taken by UUK until after the result of the strike ballot – and it may well be our threat of sustained strike action which has made them pause for thought, so this makes it ESSENTIAL that we get as many votes as is possible in the ballot. 
The employers have now prepared modelling of what pensions would look like following the proposed changes.  The link is here –http://www.employerspensionsforum.co.uk/sites/default/files/uploads/aon-hewitt-modelling-proposed-uss-benefit-changes.pdf.  Page 3 is the good one, but do read through carefully.  You’ll see that in every single example, the projected annual pension income, for any group, is significantly less than it would be on the current basis.  And remember that this is the document commissioned by UUK, in support of their argument.  In addition, their analysis includes your state pension and this has the effect of superficially reducing the impact.
 
Worse still for their argument, the base calculations that they’ve used are not the same ones as have been used by USS to model the pensions going forward for the benefit of the pensions regulator – they’re better figures.   In other words, UUK insisted on sticking to a valuation of the pension scheme which they’ve claimed makes it unworkable: but they have then used different figures to predict what your pension would be if they managed to force through their changes – and the final outcome is still startlingly bad….  Mike Otsuka of LSE has put up a new blog post which analyses the analysis – https://medium.com/@mikeotsuka/uuks-actuary-s-best-estimates-eliminate-the-uss-deficit-33dad2afc24b

 and his conclusion is that if the (better) figures used by Aon in the analysis above were to be applied to the overarching fund, then there is no deficit! He writes:

 
‘Remember that modelling by UUK’s actuary which is meant to show how well we’ll do under their proposed shift to 100% DC? It turns out that if that actuary’s same rosy picture of investment returns is applied to the valuation of the DB pension scheme, there would be no need to shift to DC in the first place!’
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Q&As re USS, answered by UCU National Pensions Official

  1. What effects would the proposed changes to the USS pension have for early career academics?

Early career staff will be the most affected by the changes as they have less built up in the current scheme. They are also more likely to be on less secure contracts. Whatever anyone has built up in the current scheme up to April 2019 will be protected however, going forward under the current UUK proposals they will have no further benefits built up in defined benefit (annual pension linked to salary and service) but will be built up in defined contribution (what you pay is defined but outcome dependent on stock market) which will be a cash sum from which you would have to drawdown until it ran out or buy an annuity (pension) which is very expensive.

2. How do the proposed changes compare to what is happening to pension systems in the private sector, where investment funds are a common pension vehicle even for third sector employers?

Very like private sector pensions in that the build up is in defined contribution but the death in service and ill health will continue to be defined benefit.

3. Do we know in what kinds of investments our pensions will be held in, if the changes go ahead, and do employees have any control over these investments?

Thousands of members already build up a defined contribution pot in USS either as an extra and by taking the ‘match’ as a way of getting an extra one percent from employers or if they earn over £55,500 and all salary over that is pensioned as defined contribution. Currently there are 6 choices for members 2 lifestyles (one ethical) and one other ethical but this would expand.

4. I was wondering if it were possible for USS members to have their contributions paid into TPS. If not now, in the future?

This is an idea we would be happy to explore but it’s not under discussion at the moment.

5. Has the Union produced detailed data of the potential impact on members at different stages of their career i.e. 25, 35, mid-career and say two to three years before intended retiring date?

The First Actuarial report shows the impact on 12 hypothetical members at different career stages:

http://www.ucu.org.uk/media/8916/TPS–USS-no-DB-comparison-First-Actuarial-29-Nov-17/pdf/firstacturial_ussvtps_nodb_29nov17.pdf?utm_source=lyr-ucu-members&utm_medium=email&utm_campaign=members&utm_term=uss-all&utm_content=Your+pension+under+attack

 

Short version:

https://www.ucu.org.uk/article/9093/Overhaul-of-university-pensions-could-leave-staff-200000-worse-off-in-retirement?list=1676&utm_source=lyr-ucu-members&utm_medium=email&utm_campaign=members&utm_term=uss-all&utm_content=Your+pension+under+attack

 

  1. What alternatives are UCU proposing?

Under discussion but will be governed by conference policy

 

  1. In the event that we do go over to a defined contribution pension, why should the university contribution be 18% to our 9%? (8%, it is only 9% with the match which will go)

That amount was based on what was needed to support our defined benefit pensions under the USS. (The employers envelope is 18% (until 2020) out of that is deficit recovery, charges, admin, money to keep the defined benefit paying out assuming the employee contributions are not going in; anything left will go into the individual DC pot and all the employee 8% will go into their individual DC pot. The individual will probably get an option to pay less in, which may be attractive to those who feel 8% is too high.

In 2011 the employers only wanted to pay 10% into a DC pot, the current offer is slightly more but the closed defined benefit section will eat money.)

Now that the money would no longer go to that, the amount they provide needs to be enough for us to have a sensible pension given expected returns. If this is above 27%, then they need to contribute more. Can such a calculation be done to determine what they would need to provide to be used in negotiations?

They don’t think they need to give you enough for a sensible pension they say they won’t contribute more, not can’t, won’t.

 

  1. In the event that we do go over to a defined contribution pension, can we get a non-negotiable guarantee that the universities will indefinitely contribute 18% (or whatever the final amount is) of our salaries into a defined contribution pension? I am concerned since currently the universities pay 18% to our 9% since that it what the USS needed to pay our pension. If the universities are no longer liable to support our pension, what is stopping them from slowly reducing their contribution to our pension?

They only ever promised 18% to 2020 and signaling they will reduce but as the Defined Benefit has no member contributions going in it will be very expensive.

 

  1. In the event that we do go over to a defined contribution pension, what fraction of the contribution will go towards supporting the defined benefit pensions? If this is any number above 0, why should we be responsible for supporting other people’s benefits? (Anyone in now will have benefits building up until 2019 not just other peoples.)

How can we be guaranteed that none of our money is used to support a defined benefit pension? Your money will go into your pot you can see it on the Investment Builder login.  Yes the employer will have to pay a lot to keep the DB section, they have a legal duty to pay out pensions already built up.

 

  1. In the event that we do go over to a defined contribution pension, why should USS be the one to manage it? For whatever reasons, they have shown that they are unable to manage our pensions effectively. I don’t see why we can’t get another company to do it.

Good point one that has been made. However, because it’s so big it can buy investments cheaply and the employer will pay member charges for most options and admin. It is up to the employer not a member what scheme is on offer in a workplace. An employer will only pay in to the one scheme per group of employees so it’s that scheme or no scheme.

 

  1. In the event that we do go over to a defined contribution pension, what happens to our matching 1%? Will this carry on or be removed?

Whatever happens the match will be removed probably around April 2019. Make the most of it.

 

  1. What kind of pensions are the leaders of the UUK on?

UUK and USS staff like UCU staff are all in USS. The Vice Chancellors and such are usually earning too much to pay into a pension there is only so much you can pay in for a lifetime if not they are in USS.

 

  1. What happens if all junior members of the USS simply pull out?

They would love it. It would save employer contributions and not have to provide an alternative, if it is DC it can run as well with 3 people its all about individual pots.

 

  1. If the future accrual of the defined benefit portion of our pensions is set to zero, what does it mean to keep the death and incapability benefit? Do our partners or dependents somehow get our defined benefit pension if we die young? If so, how is that pension calculated?

In the current UUK proposals Death in Service and Incapacity will remain defined benefit in most DC schemes there would be a lump sum. How this would be calculated is yet to be discussed.

 

  1. In the news, I keep hearing that the issue with the USS all comes down to how future risk is assessed and that since universities are long standing institutions, there is no problem in the long run (e.g. https://www.timeshighereducation.com/blog/uss-pension-changes-would-be-disaster-universities-they-are-preventable). Are the universities being unreasonable about this and if so, how can this be remedied? Can we use a 3rd party to give a fair assessment of the risk to be used in negotiations?

We have tried and taken our Actuaries, First Actuarial into meetings. No success.

 

  1. How do the changes affect those who are already drawing a pension?

No change

 

  1. How do the changes affect those who are on a flexible contract and drawing a fraction of their pension from USS?

No change on pension and same impact on pension building up as other members.

 

  1. Re the new pensions scheme, does this work like the Premium Bond system where one gets the capital (i.e. amount invested back) and then any gains on top on date of retirement or is the whole amount at risk and what you get back depends on how the market is doing on the day one retires?

The whole amount is at risk.