1. The Liberal Democrats are committed to removing students from the official migration statistics. The guaranteed continuation of home-rate tuition fees and visa-free access for EU students as part of a reciprocal agreement.
   I’m afraid that I’m not aware of Liberal Democrat policy on this issue and have contacted party HQ about but haven’t yet heard back. As I wanted to ensure that you received this in time for the 2^nd I decided to write without this information.
2. The guaranteed right to stay for EU staff and students who currently reside or study in the UK, with freedom of movement unrestricted for those who come to work or study from the EU.
   In our manifesto the Liberal Democrats have committed to pressing for the UK to unilaterally guarantee the rights of EU nationals in the UK, ending their ongoing uncertainty. We will call for the overhaul and simplification of the registration process and the requirements for EU nationals to obtain permanent residence and UK citizenship, as the current system is not fit for purpose. We will urge the government, and use our influence with Liberal leaders in European countries, to secure the same rights for UK citizens living in European Union countries.
3. Extending the franchise to EU nationals residing in Britain to vote in National Elections.
   I’m afraid that I’m not aware of Liberal Democrat policy on this issue and have contacted party HQ about but haven’t yet heard back.
4. The securing of alternative sources of university funding other than raised tuition fees.
   The EU is undeniably beneficial for our universities. It has directly invested in British universities, funding projects such as Swansea University’s new Innovation Centre. Under Framework Programme 7 (which ran from 2007 to 2013) the UK won around €8.8 billion in research grants, while paying in €5.4 billion. Through the EU’s Horizon 2020 programme the UK is set to receive £2 billion in the first two years. If the government, pull us out of the EU and the European Research Area (ERA) we will not be eligible for any future Horizon 2020 funding. Research and development, academic sharing and the exchange of ideas is essential for the future prosperity of the UK. I don’t have any specific funding sources in mind the issue of funding streams is key and as MP I will work with Liberal Democrat colleagues to identify other options.
5. The continued support of Erasmus+ and other EU research funding.
   Over the next seven years Erasmus+ was set to allocate almost €1 billion to the UK and involve 250,000 participants. A hard Brexit, which would include the UK leaving the European Economic Area (EEA), would mean an end to our participation. It is senseless for us to withdraw from such a fantastic programme that has helped so many British people to develop, broaden their horizons and gain new experiences. The Liberal Democrats will do everything we can to protect Erasmus+ and other EU-funded schemes which increase opportunities for young people.
6. The continued protection of the employment rights currently provided by EU law.
   As a party we are committed to defending social rights and equalities. Many important protections such as the right to 52 weeks’ maternity leave and rights to annual leave are currently based on EU law, and any of these rights have been upheld at the European Court of Justice. We will fight to ensure that these entitlements are not undermined.

Semi Essessi, Independent Candidate  standing in Guildford:

I take most seriously your suggestions, especially since they broadly echo the local sentiment on these issues.

To directly address your points.

1.     The removal of international students from official net migration figures.

I agree with this sentiment, although I would also be willing to support anything that helps to improve clarity here.

2. The guaranteed continuation of home-rate tuition fees and visa-free access for EU students as part of a reciprocal agreement.

I am happy to support this, however, it must be balanced against the desires of the EU itself. Any solution here would require EU cooperation – it might be out of our hands.

3. The guaranteed right to stay for EU staff and students who currently reside or study in the UK, with freedom of movement unrestricted for those who come to work or study from the EU.

I will extend my existing policy on this to cover students – the same arguments apply as for workers. There is very strong local support for this.

4. Extending the franchise to EU nationals residing in Britain to vote in National Elections.

I strongly support this idea already, although I have failed to find time to mention it. There is something inherently wrong when people who live in a place have no say in how it is run. We already do this for council elections. The same arguments apply to parliament as they do to local council.

5. The securing of alternative sources of university funding other than raised tuition fees.

I strongly believe that the only practical way to get rid of tuition fees, without jeopardising existing funding, is to address the budget deficit with a more modern, incremental approach. It is an optimisation problem and we have a huge mathematical toolbox for tackling such problems, which parliament and its advisers seem to be quite unaware of given their ideological and simplistic stances on this.

6. The continued support of Erasmus+ and other EU research funding.

I find this difficult to support, and unlikely to come to fruition without motivation on the other side. It would very clearly be in our best interest – but its clearly not in the interest of the EU itself.

I am very willing to be convinced if there is a stronger case to be made for how this will benefit the EU, and I see no reason to oppose it.

7. The continued protection of the employment rights currently provided by EU law.

I would sincerely hope in the wake of Brexit that our parliament would do this anyway, with some hope that they might go even further and strengthen the rights of UK workers even further.

Bear in mind that my positions is always open to change. I refuse to commit to policy absolutely up-front when we never know how the situation or prevailing opinion will be at the time it needs to be acted upon.

170307 Professor G Q Max Lu UCU Pensions Representative’s response to USS consultation document

UCU Pensions Representative’s response to USS consultation document

Andrew Mason UCU Pensions Representative
Surrey University
Professor G Q Max Lu
President and Vice-Chancellor

Dear Professor Lu,

I am writing to you as the Pensions Representative for UCU at Surrey University. I know that you were not in the U.K. at the time of the 2014 USS pensions’ revaluation and subsequent downgrading of employee benefits when the scheme moved from a long-established Final Salary Defined Benefit Scheme to the current hybrid scheme which comprises the old final salary scheme, a CRB defined benefit scheme and a defined contribution scheme. In addition to the complexities of having three pension schemes where there once was one there was universal agreement amongst employees who are members of the USS scheme that our benefits and our conditions of employment had been downgraded.

Part of the problem with the last valuation was the methodology, the so-called ‘gilts-plus’ methodology which suggested that the scheme was in a substantial deficit and required extra contributions from the universities and members. This methodology was criticised in many quarters and may not be the most appropriate method of valuing the scheme, particularly at a time of unprecedentedly low interest rates in the wake of massive quantitative easing. It also may not be the most appropriate scheme for a fund which has strong cash flow and a substantial exposure to other asset classes, including the very large exposure to equities. As a former senior investment manager who worked for USS I was astonished at the outcome of the valuation and still find it difficult to believe.
I would however like to reflect the views of the Surrey Branch of UCU, fellow pension representatives at other UK universities and those of UCU and their actuary First Actuarial as an input to the upcoming employer consultation “USS Consultation Document on Methodology and Inputs for the 2017 Valuation” that closes on the 17th of March.

As employees of the university and members of the scheme we are deeply concerned that this flawed methodology is being employed again by the USS Actuaries and also that there may be an underlying shift towards defined contributions even though the current defined contributions component of the scheme has not bedded in. Nor does it provide sufficient information on the underlying investments for scheme members to make an informed choice. The USS pension scheme has been seen as an attractive part of a University remuneration package where salaries have been stagnant and administrative burdens have increased. We all fear another demoralising and unnecessary drive to reduce pension benefits which in the longer term may prove to be detrimental to the recruitment and retention of university staff.

To the best of my understanding there is a wish by the employers association (UUK) to ensure that over the time horizon of the Employers Covenant the contingent reliance on the employers does not increase in inflation adjusted terms.

This reliance on the employers covenant is a residual figure based on an estimate of future liabilities and future assets (and other factors such as demographics of the workforce which are not relevant
UCU Pensions Representative’s response to USS consultation document to this discussion). The size of this shortfall or residual is totally driven by the underlying assumptions primarily the discount rate which is used to discount assets and liabilities and the assumed rate of return. When interest rates (discount rates) are so low, a very small change in the assumed discount rate or rate of return will have   large effect on the final outcome. There also may be a move to derisking – a shift from equities (risk & return bearing assets) into bonds (assumed to be a lower risk lower return asset). The timing of such derisking could have a significant impact on the fund as we have experienced an unprecedented period of very low interest rates (very high bond prices) and it would be disingenuous to assume that a major correction in this asset class may not occur over the timescale of the employers’ covenant. Thus a prudent strategy, which is not necessary for a cash flow positive fund, may hold significant implementation risk.

I apologise for the technical nature of the rest of the letter which is based on discussions of the proposals which have taken place at other forums but which outline some key issues in the current
debate. I have attached First Actuarial’s (UCU’s actuary) document released in Dec 2016 given which argues that given how expensive it now is to generate income from gilts that a significantly greater
weighting of a self-sufficiency portfolio toward equity than gilts plus 0.5% would be a more efficient means of delivering self-sufficiency. We also believe that USS’s best estimate of returns on equity
must be assuming very modest real dividend growth, much lower it is than First Actuarial’s best estimate, which assumes 1% real growth over RPI. I would also like to draw your attention to the updated cash flow projection chart from First Actuarial, (PDF attached) which suggests that, as a result of the recent cuts to employees DB pensions, the scheme will remain in positive cash flow for the next 60 years. For reasons which are mentioned below in numbered excerpts from First Actuarial’s submission to the 2014 valuation, such positive cash flow greatly diminishes the risk of remaining invested in return-seeking assets such as equity.
I have also attached Aon Hewitt’s UUK’s submission for the 2014 valuation, as a means of avoiding needlessly layering prudence upon prudence. Such flexibility still involves a commitment to a substantial level of prudence which is inherent in USS’s Test 1 which relates to the technical provisions the reliance on the employers’ covenant.

The following points have been made by UCU, their actuaries and Pension representatives from various universities:
i. While the net cash flow is positive, there is no need to sell any assets and therefore no disinvestment risk to the USS. Low market prices are beneficial during this {…} period of positive net cash flow [because assets are being purchased more cheaply], so a measure of risk which suggests a market fall is a problem would be giving a wrong message.
ii. While there is no requirement to sell assets, volatility from market value fluctuations is not a concern for the USS: the main concern is the volatility in asset income. Measures of risk and funding level which are market value sensitive, as opposed to asset income sensitive, are likely to be inappropriate in this context and should be given little attention.
i. In the >99% likely scenario of USS continuing as an open scheme sponsored by employers
with a robust covenant, the issue of very high relevance is the rate of growth of asset
income. Income uncertainty, not market value volatility, is the key issue for the scheme.
UCU Pensions Representative’s response to USS consultation document

As we can see, moreover, from graphs such as the following, dividend income from equity is much more predictable and less volatile than the asset price:
So long, therefore, as the scheme is valued in a manner that is sensitive to these more modest fluctuations in investment income rather than the greater volatility of asset prices, it seems unlikely that an in extremis scenario would emerge in which a funding shortfall becomes so great that employer contributions would need to rise to the level of 25%. First Actuarial has proposed an Internal Rate of Return (IRR) method of valuing the scheme that tracks changes in income rather than prices. See p. 7 of the attached document prepared by First Actuarial for some modelling of this approach, as applied to USS.

During communications with other Pensions Representatives it seems that not all employers/Universities accept the USS view of the world and the potential impact for employers and employees contributions. We urge you to get further clarification and supporting evidence from USS with regard to the level of risk and some explanation for their adherence to a possibly flawed valuation methodology. We feel that the case outlined above, maintaining contributions and benefits at least until 2020, provides a sensible and prudent means of sustaining our current defined benefit scheme and should not be rejected on the grounds that it may, under extreme circumstances, expose employers to further risk.

I look forward to hearing from you

Yours Faithfully
Andrew Mason

Ps This is an open letter which will be distributed to all members of the UCU Surrey Branch and I trust you will not object to your response being distributed to members
Attachments:
Aon Hewitt UUK 2 Dec 2014 response to AV consultation
uss_firstactuarial_2017valuationinput_reportforucu
First Actuarial’s USS 2017.03.01 cash flows
UCU Pensions Representative’s response to USS consultation document

On Friday 10 February, Professor Nigel Gilbert, founder and director of Surrey’s Centre for Research in Social Simulation, received a CBE (Commander of the Order of the British Empire) for services to engineering and the social sciences.

The distinguished academic, who is an expert in computational social science, social simulation and sociological methods of research and statistics, joined Surrey as a Lecturer in 1976, before becoming a professor in the Department of Sociology in 1991.

Professor Gilbert pioneered the development of computer programs to help people work out their entitlement to benefits, as now routinely used by advice services. He was also one of the first, with Surrey’s Professor Sara Arber, to use computer files of survey data collected by the Office of Population Censuses and Surveys, a data source that has now become commonplace in sociology.

Speaking about his CBE, Nigel said: “It is a tremendous honour to receive this prestigious award.  I feel very fortunate to be involved in work that I feel so passionate about, and am truly grateful to all my friends and colleagues for supporting me.”

Dear Members,

We have now finalised the details of the upcoming UCU AGM.

Date: Wednesday 2^nd November

Time: 12:00 – 14:00

Location: Room LTM

If anyone would like to step forward and discuss the roles available on the UCU Committee then please get in touch to discuss. Nomination forms for Committee roles are also available by emailing [email protected]

We hope to see you all at the AGM to discuss the challenges and successes that UCU has experienced over the last academic year. The Committee will also be keen to gain feedback from members as to the future priorities and focus of the Branch. Your opinion is important and will be considered.

Please do not hesitate to get in contact with any questions.

Surrey UCU Branch Administrator [email protected]