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University staff to vote on future of USS next week

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The University and College Union (UCU), which represents the UK’s higher education employees, will ballot its 110,000 members next week on proposals aimed at ending the ongoing deadlock over changes to university pensions.

UCU made the announcement in the face of prospective strikes at 13 universities around the UK starting on April 16. Further industrial action – in addition to the 14 days of protests since February 22 – are planned later in the spring at the remaining 52 universities across the country.

Strike action relates to proposals put forward in January to close the defined benefit (DB) section of the £60bn (€68.5bn) scheme. After UCU rejected a proposal earlier this month, the union and universities have since provisionally agreed to keep the DB section open to allow more time for an expert panel to scrutinise the scheme’s valuation.

Sally Hunt, general secretary of UCU, said: “These latest proposals were won by the solid action of UCU members and now is the time for them to have their say on what happens next.”

The UCU’s move met with qualified support from Universities UK (UUK), which represents the university employers. A spokesperson said: “Employers have indicated their support for this proposal, however this is conditional on the suspension of industrial action.

“Suspension of this action would be a huge relief to students ahead of the main examination period.”

UUK has claimed that maintaining the DB scheme is too expensive, while UCU said its members could see their pensions cut by as much as £10,000 a year. An average lecturer could lose up to £200,000, the UCU claimed.

At present, employers contribute 18% of employees’ salaries to USS, and UUK has claimed that any increase in contributions would lead to a reduction in funding and possible redundancies. UUK said that the cost of future pension benefits had already increased by a third since 2014.

Under the terms of the proposals laid out for UCU members, a joint expert panel would be formed from experts nominated by both sides. In a letter to UCU members last week, Hunt said the panel’s task would be to “agree key principles to underpin the future joint approach of UUK and UCU to the valuation of the USS fund”.

All member pension benefits as well as employers’ contributions to the USS would be frozen until at least April 2019.

At the heart of the dispute is a wider issue over the affordability of DB pensions in the UK. Many firms have since dropped the schemes, moving instead to offer the much cheaper – but riskier for members – defined contribution plans.

In December last year, British Airways announced it would close its DB scheme, following in the footsteps of BT. Royal Mail, Britain’s national postal service, has said it intends to close its DB plan to further accruals at the end of March, with a plan to replace it with the country’s first collective defined contribution scheme.

Earlier this year, JLT Employee Benefits reported that just 19 of FTSE 100 companies retained DB schemes for employees.

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