Notes on USS Reform

This dullish page contains some personal notes on the proposed reforms of the USS pension scheme. The information might, or might not, be correct, but is presented in good faith...

Fear of a funding hole in the USS pension scheme is likely to result in the final salary section being closed even to existing members, and all being moved to a career averaged scheme. Whilst removing some of the iniquities of the current two tier system, the proposed career averaged scheme, and the treatment of accrued benefits in the final salary section, seem ungenerous.

Two points are causing particular controversy. Firstly a proposal that guaranteed (i.e. defined) benefits should apply to just the first £40k of one's pensionable salary, and secondly the treatment of accrued benefits in the old final salary scheme.

Herewith a PDF of my own notes. The examples in it show that differences in the detail of schemes can lead to differences of a factor of two in the resulting benefits, which could amount to six figure sums quite easily. Perhaps the issue cannot be condensed into a sound-bite as easily as the difference between a 1% and 2% pay rise, but in terms of value a decent pension can be worth 25% of salary (the rather good Teachers Pension Scheme has a total contribution rate of about 26%, and applies to many of our colleagues in the former polytechnics).

The UCU's recent ballot gained support for action short of a strike (86.7%) and strike action (77.8%) on a 44.5% turnout. The timetable imposed by the Pensions Regulator made balloting after a final offer is received impractical.

Supported by this ballot, and faced with continuing intransigence in negotiations, the UCU has called for an assessment boycott from 6th November.

Updates

Since I wrote the above, it seems that the proposed ceiling for the guaranteed part of the pension now relates to contributions from the first £50k of earnings, not £40k. This change is referenced in a letter of 21st Oct from Michael MacNeil, the UCU's head of negotiations: UCU HE/233. This ceiling is still below the start of the Grade 10 band (Senior Lecturer).

Further Update (6th November 2014)

Michael MacNeil has written a letter to Universities criticising the punative wage deductions some are proposing (or taking) for the action short of a strike. Separately he has produced a detailed critique of the proposed reforms to the USS, and outlined an alternative proposal. These documents can be found on the UCU website as UCU HE/236.

Further Update (end November 2014)

The UCU has suspended its marking boycott as meaningful talks have resumed, and it has been agreed that no wage deductions will occur in respect of the current action. Separately Imperial College has produced its own analysis of the problem, an analysis which is critical of the USS position. In particular it believes that the deficit in the USS is being over-estimated, a point that the UCU has long made.

Useful links:

And, of course, a collection of generic UCU links: USS on national site, UCU national site, Cambridge site.

Comments to mjr19 @cam.ac.uk.