The picture for staff who join USS now is more complicated. They will have to pay 1.5% more. To take the UCU example of a 25-year old retiring at 68, she would get an increase in 6% for her eventual pension. Even then, those who retire as professors will be in the Defined Contribution scheme, and would probably find their ultimate pension reduced compared to the current CRB scheme! But over her career, the staff member will have paid around an extra 64.5% of her average annual salary into the scheme.These ‘tradeoffs’ disguise one simple point. The negotiations are constrained by the cost- envelope of the deficit. During the negotiations, the Employers did not increase their payments over the 18% they had already agreed. The apparent improvements over the UUK offer are due to increased employee contributions. The one tangible improvement is the shifting of the Defined Contribution threshold cap – but this will be at the price of the union conceding the Defined Contribution principle, with a lower employer contribution.
UCU is paying the price for prioritising negotiations over campaigning, and of conceding the principle of Final Salary in their counter-proposal. This is not just an issue for HE members. The ditching of Final Salary in USS will make it harder for UCU in FE and post- 92 to unite with the NUT to resist the Government’s plan to close the Final Salary part of the Teachers Pension Scheme.
Members of USS in post-92 institutions are not even being given a vote, although the outcome of our dispute will affect their pension.
Not only does the proposed offer end Final Salary, it also concedes the principle that a pension should be a Defined Benefit scheme – i.e. a scheme where members can work out their pension. The proposal states that all salary earned above a £55,000 ‘cap’ will be paid into a second, Defined Contribution scheme, i.e. a fund where pension benefits are more like a stock-market-invested savings fund. These schemes have been disastrous for workers in the private sector, with pensioners finding out on retirement that their pension is worth far less than they thought.
Although the Employers are not proposing a full Defined Contribution scheme but a hybrid one, it will be easy for USS to be devalued further in the future by lowering the cap (or by not uprating it by RPI). Since they cut their contribution in the DC scheme, their incentive is obvious. At present, about 25% of existing USS members will contribute to this scheme – not just a few ‘high earners’. If we concede this now, it opens the prospect of a wholesale shift to a purely DC scheme in the medium term. This has already happened across the private sector.
These schemes minimise risks to USS and to the employers, who currently have to pick up costs when one of their number goes bankrupt and cannot pay exit costs. Stock market losses are borne by members.2
UCU – the leadership exposed How did we get in such a mess? How did our negotiators get sucked into a negotiation where the only outcome would be a pension cut? Why have members been denied any opportunity to challenge the premise of the deficit?
2
UCU has constructed a modeller to help members try to work out the value of their pension (2015 prices). Whereas other calculations are based on a formula, this modeller has to guess the Defined Contribution element, and this affects all projections for staff retiring on £55,000 or more.
The ‘common sense’ strategy of the UCU majority has always been to see negotiations with Employers as the main goal of industrial action. The Left sees victory over Employers as the goal (and negotiations to conclude the terms of that victory).
In a period when the employers are not on the offensive, this ‘common sense’ strategy may appear credible. But when faced with a massive attack on our pay, jobs or pension benefits, it is woefully inadequate, and guaranteed to fail in advance. This ‘strategy’ is exposed as little more than begging the Employers to go easy on members.
This focus on negotiations at all costs means that the UCU leadership has not organised to prepare members to take the industrial action – the alternative to a sell-out. We have to turn this around.
What all members need to do
- Campaign against the sell-out – hold meetings in schools and departments, and organise branch meetings urgently. Branches and branch executives can and should recommend rejection, even if the HEC does not. Most of all, members want to know that, if they vote to reject the proposal, everyone in the union, from the leadership to their colleagues, are ready to take the necessary industrial action to win the dispute. We have to organise.
- Demand a Higher Education Sector Conference – pass the motion for a Special HESC at a quorate branch meeting in the next three or four weeks. UCU ‘consultation’ meetings with branch representatives have no power to demand our leadership acts in line with branch votes and union policy. Whatever happens in the consultation, UCU is our union, and we need to come together to democratically debate and hold our leadership to account. More than 20 branches have passed the motion calling for an HESC but this number has been challenged. HEC members have not even been told which branches’ submissions have been accepted. Recognising the groundswell from members, the HEC could simply call it themselves but again they have chosen not to. So we need to keep the resolutions coming in.
- Vote for a stronger UCU leadership – vote for Left candidates in the coming election. We need a stronger UCU, more reps and activists. But this dispute has exposed the difference between the Left and the majority at the top – and the gap between this HEC majority and the membership. This dispute is not going to be the last. We need a union leadership that organises to win.
Marion Hersh, NEC member and USS national negotiator, University of Glasgow Sean Wallis, NEC member, University College London Ioanna Ioannou, NEC member, University College London Prof Andreas Bieler, NEC member, University of Nottingham Lesley McGorrigan, NEC member, University of Leeds Karen Evans, NEC member, University of Liverpool Lesley Kane, NEC member, Open University Saira Weiner, NEC member, Liverpool John Moores University (post-92) Sue Abbott, NEC member, Northumbria University (post-92)
A short version of this statement will be submitted to the Times Higher. To add your name, please email s.wallis@ucl.ac.uk.
Model Motion to recommend rejection of the offer This UCU branch believes that the current ‘potential agreement’ offer represents a major cut in pensions. The offer accepts the parameters of the huge projected deficit, and cuts pensions to fill this gap. As well as ending Final Salary, it concedes the principle of a Defined Contribution element for contributions over £55,000 for which the Employer pays 12% instead of 18%, that provides members with no certainty about the value of their pension, and paves the way for future concessions.
This UCU branch therefore calls on all members to vote to reject the offer, and to demand HEC officers call hard-hitting industrial action to win the dispute.
Model Motion to call for a HESC This UCU branch supports the call for the requisition of a Special HE Sector Conference under rule 16.10 to debate the campaigns to defend pensions in HE, and to defend the capacity of the UCU to call industrial action short of a strike as part of those campaigns.
Procedural notes: 1. Motions must be approved by a quorate branch meeting. (Please include in your
submission the number attending the branch meeting, and what the branch quorum is.) 2. The motion must be passed through twenty branches from separate institutions.
(Institutions with more than one branch count as one for this purpose.)
Motions should be sent to Sally Hunt (shunt@ucu.org.uk), General Secretary, with a copy to Michael MacNeil (mmacneil@ucu.org.uk), National Head of Bargaining and Negotiations, Joanna De Groot (jdegroot@ucu.org.uk), Vice President, and Elizabeth Lawrence (president@ucu.org.uk), President.