Industrial action threats in response to new USS employer consultation

UUK, the group representing 350 employer members of the Universities Superannuation Scheme, launched a consultation on Wednesday on a range of proposals designed to be an alternative to those that the USS trustee made in response to its 2020 consultation.

The USS proposals, which would see the contribution rate raised to between 30.7 per cent and 42.1 per cent of payroll under the most favourable circumstances, and otherwise to 56.2 per cent absent certain pledges of support by employers, have been roundly criticised as unaffordable.

Both UUK and UCU have attacked the bases on which those scenarios were presented, questioning the level of prudence used, as well as a number of other assumptions underlying the 2020 valuation response.

In launching its own consultation response, which looks at ways to cut the worryingly high opt-out rate from the scheme, as well as asking employers for stronger covenant support measures, UUK argued that it will continue to pressure USS into revisiting its valuation assumptions.

In response, UCU has accused UUK of failing to challenge demands for “unnecessary and damaging” cuts to the USS.

In a statement, the union said that employers should deliver on previous promises to challenge the USS trustee, rather than look to cut members’ benefits, and warned industrial action may result “if universities fail to make radical improvements to UUK’s initial proposals”.

Jo Grady, UCU’s general secretary, said: “UUK’s plans to cut the guaranteed, defined benefit element of members’ pensions are almost identical to the ones which they put forward and which members rejected midway through UCU’s 2018 industrial action — and they come at an even higher price in terms of employer and member contributions.”

Grady argued that the proposals to address the opt-out rate — as high as 20 per cent, with three in four of those not participating citing affordability as a reason for their absence — are too vague, “and will not be implemented in time to prevent the drastic contribution increases that are already scheduled for October 2021”.

She criticised the lack of “concrete evidence” of UUK’s commitment to challenge the USS trustee’s valuation assumptions, and added that it seems to have “de-escalated from their previous stance”.

“Since our last round of industrial action, UUK has spent more than a year in talks and negotiations assuring UCU that they will confront USS over its unilateral, poorly evidenced approach to setting contribution rates. But the response of UUK to USS’s refusal of their request for a review of the 2020 valuation has been weak, to say the least,” Grady said. 

“UUK is talking about strengthening the employer covenant, but the concessions that they are asking USS to make in return for this are far too small.”

UUK has previously said that, though committed to challenging the USS trustee’s assumptions, it accepts that the status quo is untenable and reforms are needed. 

Grady continued: “As it stands, employers have offered very little to dissuade members from voting for another round of industrial action.

“USS is a uniquely robust DB pension scheme, backed by many strong employers in a financially healthy and world-renowned sector of the UK’s economy. University staff deserve much better than the weak commitments and half-baked proposals which employers are putting forward.”

In response, a UUK spokesperson said: “It is easy to simply oppose change, but reform is necessary to tackle the scheme’s funding gap and ensure that USS pensions are affordable for members and employers. We would welcome and be keen to examine alternative proposals from UCU.”