First up, something we all need to understand before reading on is that there’s no need for any contribution increase in our pensions. It has now been proven convincingly that the scheme is not in deficit. USS has lost its members’ trust and rejected some of the Joint Expert Panel’s (JEP’s) most important proposals. If implemented now, those proposals would lead to a contribution rate no higher than 26%, as it was before the 2017 valuation.
It is shocking that our employers have not joined us in pushing vigorously for USS to take the JEP seriously; it is highly unjust and suspect that USS has rejected so many of the JEP’s recommendations. Had our employers supported UCU’s calls for transparency & rigour in the valuation process these current proposals would be unnecessary. However, the employers’ behaviour since the JEP issued its first report makes it look a lot like they *still* intend to decimate our pensions with the eventual aim of doing away with the Direct Benefit part of the scheme entirely.
UCU’s position is that, absent any proper response to the first JEP report, the only fair outcome for this valuation cycle is that USS members should pay 8% and the employers everything else. This is even written into the current USS scheme rules, so it’s not like we’re asking for the moon on a stick here.
The employers are currently arguing that members should share a hefty chunk (35% of the costs over 26% that arise from the valuation). This is both unjust and irrational: the employers should cover the full costs of any increases. Why? Because:
- The employers can benefit from overpayment in one valuation cycle by underpaying in future ones, whereas members cannot;
- They’ve underpaid into the Scheme in the past (the so-called pensions “holiday”);
- They can influence the contribution rate in various ways, whereas members can’t; and
- Members have repeatedly suffered the impact of investment decisions they had no input into, in the form of benefit cuts and earlier contribution increases.
Also, they can *afford* to cover the increase, and we shouldn’t be swayed by arguments about costs. This is about priorities, and yet again our employers are choosing to de-prioritise staff.
- The independent covenant assessments commissioned by USS, along with other factors, indicate that they can afford it;
- Employers are better placed to absorb the increases than individual members;
- Members’ wages have been systematically suppressed for more than a decade; and
- Sector staff costs have fallen in the last decade from 58% of total expenditure to 54% now, and implementing our proposals would raise this figure no higher than 56%.
Given the history of cuts to our USS pensions over the last two decades (which staff accepted with little or no serious resistance), and given the vigorous suppression of our wages over the same period, members are in no position to shoulder contributions increases. Tragically, many have already left the scheme citing problems with affordability.
Yet the employers, as they always have, continue to work on the arrogant assumption that their own activities, and bottom lines, must never suffer, whatever the cost to us. The employers never:
- countenance cuts to capital expenditure (“shiny new buildings”);
- think about changes to their business models; and/or
- draw on their (often huge) reserves, even in the case of emergency (and what greater emergency than this?).
Instead, they consistently tell us that *we* have to sacrifice our current (or retirement) income to deal with problems that are largely of *their* own making. Enough is enough: it’s time to level the playing field; it’s time, for once, for the employers to give us real support when it matters.