Defend USS - the USS pensions dispute
Universities Superannuation Scheme (USS) is the principal pension scheme provided by Universities, Higher Education and other associated institutions for their employees.
UCU are in industrial dispute with our employers over imposed changes to USS benefits, though industrial action is currently suspended pending the outcome of negotiations.
28 May 2013: UCU Congress HE Sector Conference received and approved a report and recommendations from the HEC's Superannuation Working Group.
This report, the USS report to sector conference - May 2013 (UCUHE191, PDF), provides:
- Details of the recent consultation exercise with branches/LAs;
- Results of the members' survey (PDF)
- An update on the negotiating environment;
- A reminder of the comparisons undertaken between USS and the TPS CARE scheme;
- Details of the proposals under discussion with employer representatives
- Conclusion and recommendations
In brief, the negotiating environment is more difficult than last year and we may have to move towards the achievement of our objectives by a series of incremental steps rather than a single comprehensive settlement. Nonetheless, we are pursuing these negotiating objectives in talks with the employers' representatives scheduled in June and July and planned to continue from September onwards.
Congress also carried an amended Motion HE35 on responsible investment by USS.
UCU recognises that some changes were necessary so that USS can guarantee to meet its future liabilities to pay the pensions for which it is liable. After all, people are living longer, so drawing more in pension payments from the scheme. The changes introduced in October 2011 were designed to, and were adequate to, safeguard USS against increasing longevity.
This latest triennial valuation took place as at 31 March 2011, when the funding level of the scheme on its technical provisions basis was 92%. By March 2012, the funding position had deteriorated to 77%. Clearly, a large and rapid fluctuation like this cannot be accounted for by increasing longevity or other effects acting over the long term. The real reason for the large drop in funding that has recently affected most final salary pension schemes is a combination of the current unusual macroeconomic policy and new stricter and relatively inflexible pension valuation regulations (see the National Association of Pension Funds October 2012 paper: DB funding - a call to action, PDF).
In response to the global financial crisis, the government has extended its policy of “quantitative easing” which has resulted in the yield on government bonds (Gilts) sinking to an all-time low – in fact, fluctuating around zero. It is this collapse of the Gilt yield that has had a major and detrimental impact on the estimated funding level of USS as measured by the contested methodology (see which has, at least until very recently, been practically imposed by the Pensions Regulator). This methodology insists that the Gilt yield must be the key factor in estimating the value of USS liabilities. This is why, at its most recent on-going valuation, the funding level of USS was calculated to have as low as 77%. UCU would contend that this paper exercise bears little relationship to the real value of assets and liabilities and that these figures have not emerged from a formal triennial valuation so do not require any immediate action from USS.
8 May 2013. In the Queen's Speech the Government announced the Pensions Bill which which proposes to change the State Pension and Second State Pension from April 2016. For anyone drawing his or her full state pension there will be a new flat rate state pension, which will be the equivalent of £144 per week in today’s money. However, implementation of this change will have an impact on pension related costs for both employees and employers. Like other schemes, USS will lose its “contracting-out” status leading to members paying 1.4% more National Insurance and employers 3.4% more on earnings between £5,500 and £40,000. That means those earning around £40,000 will pay around £480 a year more in NI. The increase in employer NI costs will be considerably less than this for universities due to the operation of the upper accrual point. Nevertheless, there is little doubt that any increase in costs will make the employers more defensive in pension and pay negotiations. The reforms also contain provision for a so called "statutory override". This will give the employers a one off statutory right to recover increased costs by imposing unilateral changes - by increasing contribution rates and/or by cutting benefits. We will need to be on our guard against this danger.
- Local press coverage of the 30 November Day of Action.
- Bristol University lecturers start work to rule action (11 October 2011)
Our national employers' representatives have imposed an inferior, two tier USS pension system which will see new starters receive much lower benefits; reduce protection of our pensions against inflation and reduce the amount staff receive if they are made redundant.
The proposals have been opposed by USS members in two referendums, and by UCU members in two industrial action ballots, but the employers have insisted on imposing them (history of this dispute). We suspended our working to contract in February 2012 in the hope of meaningful talks with the employers, but the talks so far have failed to deliver any concrete proposals to improve the changes imposed (on existing members and a much worse scheme for new entrants) and at present the Teachers Pension Scheme (TPS) is still far superior to what is being offered to our members. As such the UCU has called for a return to working to contract to further empower our negotiators. For technical details of the comparison of USS and TPC see the appendices to UCUHE/154 (PDF).
More about the USS changes >>> including facts and figures on what USS members stand to lose as the result of these changes.
Industrial action (work to contract) is currently suspended pending the outcome of negotiations. Please note that the special sector conference motions explicitly guaranteed that the return to normal working does not imply we are willing to work excessive hours. We have a locally negotiated workload protection agreement at Bristol.
defenduss.web.ucu.org.uk our national UCU action website.
Our members in Bristol are suspending working to contract from Wednesday 23 September.
More about the industrial action >>> including how to ask a question.
Local UCU pages
- USS consultation - February 2013
- More about the USS changes, including the potential cost to you
- More about the industrial action, including local questions and how to ask a question
- 30 November 2011 Day of Action - local and national press coverage
- UCUHE191 (PDF) USS report to sector conference - May 2013.
- UCUHE/155 (PDF). National USS Dispute - Notice of resumption of industrial action served on employers on 12 June 2012.
- UCUHE/154 (PDF). HEC Superannuation Working Group report to sector conference, including appendices comparing USS to TPS (Teachers' Pension Scheme)
- UCUHE/132 (PDF). This circular informs on the outcome of the USS pre-92 conference held on 31 January, which debated the report of the negotiators. There is also a report from Bristol delegates.
- UCUHE/131A (PDF): Motions and amendments for the conference of pre-92 branches on USS
- UCUHE/129 (PDF): USS report and motion for the conference of pre-92 branches on USS on 31 January 2012.
- Working to contract and working to rule (PDF, 85Kb) - guidance for UCU branches and members
- USS pension dispute briefing - including estimates of the pension loss you face and the ballot results
- Defend USS: Members' Briefing, June 2011 (PDF, 62Kb) - what negotiations so far have achieved, what further we need to press for
- Alan Carr, national negotiator, talking to Bristol UCU on 27 August 2011 (mp3 audio, 28 Mb, 1 hour): available to UCU members from firstname.lastname@example.org
- USS valuation: UCU briefing note (PDF) and General Secretary's letter to USS Board (PDF)
- 30 November briefing - USS Pensions: some myths exploded (PDF)
National UCU resources
- Defend USS - your one-stop-shop for this action
- UCU national website - top stories and all things UCU
- Defend your USS pension rights - history of the USS negotiations
- UCU member communications - including archive of weekly campaign updates and national (Sally) emails
- Other UCU pension campaigns (including Teachers' Pension Scheme for post-92 institutions)
- 30 November - defend public sector pensions and Action 2011 Live!
- Joint union booklet on public sector pensions (PDF, 878Kb)
- TUC campaign for Pensions Justice and Day of Action on 30 November
- False Economy - activities and events in support of 30 November
Note: some of the documents on this webpage are in PDF format. In order to view a PDF you will need Adobe Acrobat Reader