Editorial: The fight for defined benefit accrual is coming to a head at universities after employers showed their hand early in the dispute over pensions.
Strikes affecting exam season was the worst-case scenario for universities. They risk their reputation and potentially financial losses in case some students demand repayment for lost teaching time and delayed studies.
After a deal was proposed that would have seen a level of DB accrual for three years from 2019, union members might have felt that more should and could be had from Universities UK.
This tough stance from staff is not a bolt from the blue. The image we have of universities often belies the employment realities. I have met university lecturers who were forced to work shortly after operations; students of one pointed out during a lecture that her knee had started bleeding.
I know another who is disabled and regularly forced to miss meetings because these have been convened in locations that are not accessible to him. A third university employee was made redundant when she was on maternity leave.
Such regular human resources failures, combined with the exorbitant salaries of many vice-chancellors, have, I can only conclude, engendered an unforgiving workforce.
The carrot of a collective defined contribution arrangement offered to academics remains a red herring as long as there is no secondary legislation. Pensions and financial inclusion minister Guy Opperman has however now said the fact that some are “very keen” on CDC means “we are tempted to facilitate and assist them” with it.
Whether CDC will ever take off in the UK is yet to be seen; its proponents argue retirement incomes are higher, but critics point to possible intergenerational fairness issues.
Vested interests exist both ways: platform providers and mastertrusts usually find flaws with CDC, and actuaries and consultants – the latter often struggling to get DC appointments – argue it is the future.
The evidence on CDC so far is inconclusive when it comes to member outcomes. The same can be said for DC.
Sandra Wolf is editor at Pensions Expert. You can follow her on Twitter @SandraCWKand the team @pensions_expert.
