Staff at UK universities have warned of nationwide strike action in protest over higher contribution rates imposed by the Universities Superannuation Scheme (USS).
The University and College Union (UCU) made the threat after USS’ Joint Negotiating Committee (JNC) agreed yesterday to raise contributions to 21.1% for employers and 9.6% for members.
A spokesperson for Universities UK, which represents employers, said the JNC’s contribution plan provided “a fair, short-term solution, acceptable to the Pensions Regulator and the USS trustee”.
It would also allow time for the Joint Expert Panel (JEP) – set up last year in an effort to resolve disagreements over USS’ 2017 valuation – to “suggest options for the longer term” that could inform the 2020 scheme valuation, the spokesperson added.
The contribution rates were identical to those put forward by UUK at the end of July , which it said would take employers “to the brink in terms of their ability to sustainably maintain contributions to USS”.
However, the University and College Union (UCU), on behalf of members of the £68.5bn (€75.6bn) scheme, said it would ballot members at 69 higher education institutions across the UK on possible strike action in protest at the increase.
It has argued for much of the past two years that its members should not be forced to pay contributions higher than the current level of 8% of salary, and that universities should foot the bill for any increases.
In a statement, the union said the member contribution would rise to 11% of salary from October 2021 if the two sides could not agree an alternative based on the scheduled March 2020 valuation.
Sam Marsh, a member of the JNC representing the union, claimed on Twitter that the JNC’s decision was the result of the two sides being unable to agree on an approach, and the committee’s chairman Sir Andrew Cubie casting the deciding vote.
There was no agreement between the two sides, which led to the independent chair being forced to use his casting vote. Negotiations have taken place on an extremely compressed timescale due to delays at the #USS board in finalising and submitting a valuation to the JNC. 2/— Sam Marsh (@Sam_Marsh101) August 22, 2019
He added: “Alongside the huge amount of work needed to progress matters through the committee, we have spent many, many hours negotiating both formally and informally with the employer representatives.
“But the unfortunate truth of negotiating for a union is that on substantive matters, especially when money [is] concerned, the other side will only listen properly when strike action is imminent.”
The UCU will ballot members on strike action from 9 September until 30 October, coinciding with the start of the 2019-20 academic year.
Update, 5:30pm 23 August: The UCU rejected a compromise offer from the UUK during negotiations, according to a statement from the employer organisation published this afternoon.
The UUK said it had offered to shoulder an additional 0.5% of the contribution rate. This would have meant members paid 9.1% and employers 21.6%.
“The UCU negotiators indicated they were unwilling to compromise, refused to consult their members over the alternative offer, and consequently rejected it,” the UUK statement said.
A spokesperson for the employer organisation added: “It appears that UCU’s ‘no detriment’ position means no compromise.
“By rejecting the alternative offer proposed by employers, UCU have passed up an opportunity to conclude the valuation with a lower member contribution rate, in line with what the Joint Expert Panel proposed, and 1.3% lower than the rate that otherwise would have applied under the 2017 valuation backstop.”
Joint Expert Panel
The union led nationwide strikes last year in protest at the proposed closure of USS’ defined benefit section. The proposal was later scrapped and the JEP set up.
In September 2018 the JEP , chaired by Joanne Segars, reported that USS could reduce its deficit through implementing a number of changes, including taking more investment risk and re-evaluating the sponsor covenant. If all its measures were implemented, the JEP said total contributions could be kept to 29.2% – an increase on the levels at the start of the current dispute, but lower than any other proposal.
The UCU wants the JEP’s proposals to be implemented in full. Jo Grady, UCU general secretary, said USS members “should not have to pay” for employers’ “failings” with regard to the JEP proposals.
“Universities have passed up an opportunity to bring us back from the brink of another round of strikes,” Grady said. “We are incredibly disappointed they have pushed to burden members with unnecessary and unfair extra costs. These increases have serious consequences and may force some members to leave USS, jeopardising not only individual retirement plans but the future of the scheme as a whole.”