UK - The University of Sussex has warned continued strike action by trade unions over changes to the £61m defined benefit (DB) scheme for support staff, will not resolve the issues facing the fund.

The university, in the southern English town of Brighton, warns liabilities could hit £500m (€582m) by 2030.

Unite the Union has already staged three days of strike action at the university, including one this week after talks involving the Advisory, Conciliation and Arbitration Service (ACAS) broke down, and it plans to raise concerns about the changes at meetings next week and demonstrate outside the university's council meeting later this month.

The university plans to close the University of Sussex Pension and Assurance Scheme (USPAS) to new members, including lab technicians, computing workshop and estates staff, and will phase in increased employee contributions - from 7% to 9% - over a period of three years.

However the institution highlighted it will establish a new defined contribution (DC) scheme for future staff with an employer contribution ratio of 2:1 and a paid bonus every five years, which it claimed will result in the total value of employer contributions almost doubling from £2.2m in 2006 to £4m by 2012.

The University of Sussex confirmed it had been conducting formal negotiations with campus trade unions over the proposals, but following a vote in favour of strike action Unite had withdrawn from the process in September.

Despite "informal discussions" with the union after the first two days of strike action in October, the university claimed, "we sadly heard nothing more from them, other than to notify us of further strike action. This is not the way to resolve such issues".

The university - which boasts alumni including Peter Hain, former UK secretary of state for work and pensions, and Thabo Mbeki, former president of South Africa - said the changes to the scheme are needed to "protect local pension provision" and make it "affordable and sustainable".

Figures from the university's financial statements showed at 31 July 2007 the scheme had a deficit of £22m, and that a recovery plan had been agreed with trustees and the Pensions Regulator (TPR) to repay the deficit over a period of 20 years - starting 1 August 2007 - through increased employer contributions and payments into an escrow account.

The statement highlighted that as a result of these increased payments - estimated to be £1.5m for the first three years, and rising gradually over the next 20 years - it intended to review the future benefits of the scheme past 1 August 2008.

The university stated: "Doing nothing to address future costs and exposure to risk is not an option. Leaving the scheme unchanged and open for future staff would lead to projected liabilities of nearly £500m by 2030, according to independent actuarial advice. This presents a significant exposure to financial risk."

It also pointed out 45% of workers eligible for the USPAS cannot currently afford to join the scheme, so the new DC option will provide more flexibility and benefit a higher number of workers.

In addition, the university dismissed suggestions it is operating a two-tier pension system between the USPAS and the national Universities Superannuation Scheme (USS), as it pointed out it has no control over the USS - which is managed outside the institutions - and warned that the DB scheme for lecturers "will be facing exactly the same issues" as the USPAS.

Tom Armour, branch chair of Unite, said: "We will take our argument direct to the council, with the expectation they will recognise the inequalities of what is being proposed and defer any decision until the Universities and Colleges Employers Association (UCEA) Pensions Forum have delivered their report on national pension strategy in early 2009."

But the university stated: "There is no national solution each university is responsible for its own local pension provision and has to make arrangements accordingly. The reality is that there is no magic solution out there to the costs and risks associated with final salary pension schemes."

However, the University of Sussex branch of Unite claimed the union does not propose that the scheme remains unchanged, and admitted members are prepared to pay more because of increased longevity, as well as agreeing to cost sharing plans and an increase in the normal retirement age.

The branch of the union also claimed the UCEA report would propose a national solution, and outlined its further reasons for the industrial action in a statement on its website.

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