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Employers play divide and rule to push for more pension cuts

Changes to USS  imposed in 2011 created a two tier pension scheme that UCU opposed.  The changes meant that there was a big gap between the pension rights of existing members and new entrants. At the time, UCU said that when employers create a two-tier benefit system, within a few years there is pressure to close the better scheme. Employers ARE now considering further changes that will reduce the benefits available to ALL members.

The main changes imposed in 2011 were:

  • new entrants would be offered a pension not based on final salary but a career-average. UCU did not object in principle to the introduction of a career average (CRB) scheme but we did have a problem with this particular scheme, particularly the accrual rate of 1/80th. We argued for an accrual rate of 1/65th.
  • an increase in the contribution rate from 6.35% to 7.5%

Following strike action, UCU did manage to secure some improvements to the proposed changes, but the seeds of divide and rule had been sown.

USS is a private fund, and one of the last to still offer defined benefits. Across the pension landscape we have seen defined benefit schemes being replaced with defined contribution schemes, effectively transferring the risk from the employers and the fund to the individual member but leaving big pension funds with enough cash to continue acting as big players in the city markets.

Employers are now circulating information about the need to cut benefits and increase contributions because of a deficit in the fund. UCU rejects the methodology used to value the fund, and rejects the idea that the deficit means the pension fund will cost more and offer even poorer benefits.

UCU expects to enter intensive negotiations between now and November on the future of the scheme. Our aims are:

  • to maintain USS as an attractive scheme for members which is sustainable in the future
  • to address the gap between the two tiers (Final Salary members and CRB members) of USS.

Last year we put a formal proposal to the employers that we should work towards broad comparability with the TPS scheme. TPS is the scheme for UCU members in post-1992 universities. Benefits for TPS members are now significantly better than those for new entrants (CRB) to USS. The employers are playing a divide and rule game and we should not let them play us off against each other.

Whichever tier of USS you belong to we all share a common interest in securing an equitable pension which offers benefits that match those available to members of TPS working in post 1992 universities. We believe that it may be necessary for the union to take collective action to secure the best possible outcome to the negotiations. Strike action and the deployment of assessment and marking sanctions have to be contemplated.

Letters will be sent letting employers know that we may need to declare a dispute if changes are forced through. University of Bath UCU will send two delegates to a special conference on 19th September to hear the latest news from our negotiators. There will be a special branch meeting on Thursday 11th September 12.30 (1E2.4) where we will decide what we want our delegates to do. Please clear your diary to attend this important meeting.

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