University and College Union (UCU) Industrial action: UCU members support the establishment of a Joint Expert Panel to examine the USS valuation
18 April 2018
The University and College Union (UCU) has suspended planned industrial action at UCL, and supports the establishment of a Joint Expert Panel.
University and College Union (UCU) members have voted in their recent ballot, which closed last Friday, to support the establishment of a Joint Expert Panel to examine the USS 2017 valuation. This means that the planned strike action of April 2018, as well as the ongoing Action Short of a Strike (ASOS), have both been suspended. As Universities UK (UUK) highlighted, this gives students important reassurance that they won't be affected by further disruption during the revision and exam season.
The Joint Expert Panel will review the methodology and assumptions in the current valuation and provide an opportunity to consider the questions raised about the valuation by scheme members and employers. UUK and UCU will now work together to appoint a jointly agreed chair for the panel. In addition they will seek support for this process from USS and the Pensions Regulator, fully recognising their statutory responsibilities and accountabilities. Current pension benefits are guaranteed until at least 1 April 2019, therefore the panel will need to conclude its work in time to put in place a sustainable way forward for USS from that date.
We will keep you updated regarding any further developments.
Find out more:
- Ballot result on Joint Expert Panel (13 April) final result
UCU Industrial Action: information, advice and guidance
Updated 22 March 2018
Summary of guidance relating to strike action
Following an intense week of talks between the University and College Union (UCU) and Universities UK (UUK), the UCU Higher Education Committee and UCU Branch Chairs have rejected the proposed agreement from the ACAS-mediated joint negotiations. As a result, the JNC will discuss which proposal to take on to formal consultation on 29 March.
Summary of the revised reform proposal reached between UCU and UUK at ACAS:
- A transitional benefit agreement has been reached from 1 April 2019 for three years
- Employers will pay 19.3% of salaries (for 3 years)
- Members will pay 8.7% of salaries (for 3 years)
- The salary threshold will change from £55,550 to £42,000 while the accrual rate will be reduced from 1/75th to 1/85th
- Defined Contribution contributions above the salary threshold remain at 12%
- Death in Service and Ill-health benefits are retained as Defined Benefit on full salary adjusted in line with the revised accrual rate
- Indexation and revaluation will be capped at CPI up to 2.5% p.a
- Given the concerns raised by some employers and UCU about the scheme’s valuation methodology and assumptions an agreement has been reached between UCU and UUK to convene an independent expert valuation group.
- The group will be independent, involve academics, and to inform the next USS valuation, it will complete its work by the end of 2019.
- By recognising the agreement on benefits is set as a transitional 3-year solution there is commitment between both sides to engage in meaningful discussions as soon as possible to explore risk sharing alternatives for the future from 2020, in particular Collective Defined Contributions (CDC).
UCL is part of the USS and SAUL pension schemes. That means that UCL can only make employer pension contributions into these schemes on behalf of our staff. As they are collective schemes, UCL is unable to negotiate independently of UUK.
Role of USS Trustees and the Pensions Regulator
Staff have been asking for more clarification around the respective roles of UUK, the Universities Superannuation Scheme (USS) Trustees and the Pensions Regulator. UUK represents 350 employers (not all of them universities) in the pensions scheme, and any agreement it reaches with UCU will also have to be ratified by two further parties: the USS Trustees and the Pensions Regulator.
The legal obligation on USS Trustees is to ensure that the pension fund is financially stable in accordance with rules set by the Pensions Regulator. The Regulator is a public body, sponsored by the Department for Work and Pensions, set up to protect people’s savings in workplace pensions.
One of the Regulator’s key priorities is to reduce the risk that pension schemes will require taxpayer support to meet their obligations. Its interest in the USS scheme was significantly heightened by USS’s 2017 valuation. That identified a £7.5 billion deficit in the scheme and projected that the future cost of providing the current benefits would rise by a third.
UCU disputes this valuation and the consequent need to move from a defined benefit pension scheme to a defined contribution scheme – in which pension payments depend on investment performance.
Overview of the USS reform
Industrial action is taking place across 61 universities, as the University and College Union (UCU) has called on its members to take action to support a dispute about proposed changes to the Universities Superannuation Scheme (USS) Pension Scheme, to which many staff who teach and support teaching belong.
The 2017 pension scheme valuation identified that the USS deficit has risen to around £7.5 billion and the future cost of providing the current benefits has risen by over a third.
Changes to the scheme have been proposed to try to ensure a scheme that is sustainable, affordable and fair. The USS reform has been discussed during national negotiations through the Joint Negotiating Committee (JNC) which is made up of 10 nominated members, five from UCU, five from Universities UK, and an independent chair.
With the chair’s casting vote, agreement on the proposed reform was reached by the JNC on 23 January 2018. If accepted, this would reduce the scheme deficit to £6.1 billion.
UCL currently makes contributions of 18% of salary to staff pensions, and will continue to do so.
The USS scheme is used by 350 employers nationally - no individual institution can negotiate independently or have control over what is decided.
A formal consultation with USS members should commence in March 2018 and any scheme reform needs to be finalised by 30 June 2018 when the valuation must be completed.
Industrial action at UCL
UCL recognises that this is a hugely important issue and that the decision for staff to take part in industrial action is complex.
The industrial action is taking place over 14 days, spread across a four-week period with an increasing number of days each week. The dates are as follows:
- Week 1: Thursday and Friday 22 - 23 February (two days)
- Week 2: Monday – Wednesday 26 - 28 February (three days)
- Week 3: Monday – Thursday 5 - 8 March (four days)
- Week 4: Monday – Friday 12 - 16 March (five days)
Information and guidance
For students and parents
Further information for students can be found on UCL Student News.
UCL is committed to ensuring that our students are not disadvantaged by the industrial action. While action is taking place, there may be some disruption to studies but we are doing everything we can to minimise the impact this will have on students.
It is difficult to know which classes will be affected. Although we can ask lecturers, they do not have to tell us in advance. However, we have asked Heads of Department to try to check which lectures will be going ahead and which will be cancelled. As far as possible, students will be updated about changes to the teaching schedule.
For USS members
Further information can be found on the staff pensions hub.
A guidance document has been produced for USS members to give an overview of what the changes mean for individuals.
The proposal would maintain an 18% employer contribution. Any changes would not come into effect until 1 April 2019 and would apply to future benefits only.
An independent consultation will be held with all members from March 2018 on the possible impact of these pension reform on individuals.
UCL appreciates staff are concerned about changes to the scheme; however, even following reform, USS will continue to deliver one of the best pension schemes available nationally. Therefore it is important that changes are made now to ensure USS remains sustainable for the future.