Talks fail to head off USS strikes

Staff at 52 UK universities are set to strike over pensions for 14 days of escalating action beginning on Thursday and ending on March 13.

The pensions dispute centres around increased contributions to the £68bn USS, put in place as a result of the scheme’s 2018 valuation. Employers represented by Universities UK point out that they are already paying 65 per cent of this increased expense, while the University and College Union and its members dispute the methodology used to calculate contributions and argue that universities can afford to pay more.

Alistair Fitt, vice-chancellor of Oxford Brookes University and a member of the Employers Pensions Forum for Higher Education, revealed on Tuesday that given UCU’s “no detriment” position on contribution rates and benefits, employers have now overwhelmingly decided not to make a new offer to staff, leading to a “stalemate” in negotiations.

UCU rejected an improved contribution-sharing arrangement in 2019, arguing that it could not accept an attached moratorium on strike action. UUK disputes that this condition was attached to the final offer.

“The suggestion that employers should make up all of the contribution increases is simply not affordable,” said Professor Fitt. He added that “while it may be true that some employers can” take the hit, non-university employers participating in the scheme in particular would be unable to pay more.

A survey of employer attitudes has revealed very little support for a new offer. “A vast majority of employers... support the current position and believe that it is a fair conclusion to the 2018 valuation,” Professor Fitt said.

UCU general secretary Jo Grady said: "It is incredible they can accuse the union of acting in bad faith when they refuse to talk about the pay issue and have spent a whole week failing to come up with an offer on pensions. Worryingly, it looks like the hardline vice-chancellors who wish to prolong this dispute are still pulling the strings at UCEA and at UUK."

University negotiators have sounded a positive note about discussions hosted by the USS Joint Expert Panel, which aim to agree principles that protect both member benefits and the sustainability of the scheme in its 2020 valuation and beyond.

Stuart McLean, head of pensions at UUK, revealed that both employers and the union are pushing back against investment derisking put in place by USS’s trustee board. Derisking improves the certainty of paying accrued benefits, but means employers must shoulder more of the cost burden instead of relying on returns.

“USS is currently on a derisking glide path,” said Mr McLean. “Both UUK and UCU together are questioning that approach.”

However, adding that conversations are still “live”, he said a key hurdle will be balancing any re-risking against security of benefits and regulatory risk.

“The challenge there is, of course, dealing with any potential downside scenarios,” he added.

“While we might think that growth assets is a place to be... we’ll need to be able to mitigate that and make sure that pension promises are still paid.”