UCL News


Update on proposed USS pension reforms and related industrial action

30 October 2014

Last week's edition of The Week@UCL provided information on reforms of the Universities Superannuation Scheme (USS) that employers across UK higher education are proposing to manage a shortfall in the scheme of between £8 and £11 billion.

Quad in autumn

Joint Negotiating Committee

Discussions between the employers, represented by Universities UK (UUK), and the University and College Union (UCU) are facilitated under the auspices of the Joint Negotiating Committee (JNC). Members of the JNC met on the 22 October to discuss the deficit and proposals to put the USS on a sustainable footing. Employers in the USS scheme want to continue to provide a defined benefit pension scheme for employees and put forward a proposal to devise a plan that raises the employer contribution to the scheme to 18%, but also maintains a defined benefit structure for employees, albeit at a reduced level. Further detail of the employer's proposal and the reasons for it, can be found on the Employers Pensions Forum website: http://www.employerspensionsforum.co.uk/.

The UCU did not make any proposal but the USS Trustees declined the UCU's request to change the actuarial assumptions upon which the deficit was calculated and advised them of their reasons for this. The UCU has been asked to put forward any proposals for future benefit changes at or before the next JNC meeting, to be held on the 13 November. The Chair of the JNC has asked that negotiations on the detail of change are concluded by a further JNC meeting to be held in early January 2015, where a decision will be taken on the changes, and proposals submitted to the Trustees.

The Pensions Regulator

The Pensions Regulator has been informed of the employers' proposal for change, and the recent decision by the employers to increase the salary cap for calculating the defined benefit pension from £40,000 to £50,000. This salary cap change is material in the future cost of benefits, and the length of time it will take to reduce the deficit. The Pensions Regulator will respond in detail to the employers' proposals in early November and these will feed into the JNC's discussions and negotiations. The employers' proposal is the only one currently on the table.

Industrial action

The UCU has notified UCL that it is asking its members to participate in continuous industrial action short of a strike from Thursday 6 November 2014. The action will take the form of a comprehensive assessment boycott of all marking and coursework assignments.

UCL believes that UCU's notification of action short of a strike is premature, and any action will only have a negative impact on an innocent party, namely students. UUK and UCU continue to negotiate on a way forward for keeping a core defined pension benefit across the sector and no amount of industrial action will reduce the deficit of the fund, nor identify a panacea which does not include benefit change and contribution increases.

UCL reserves the right to withhold up to 100% of pay, at a daily rate of 1/260th of annual salary. Further information about how UCL intends to manage the boycott will be provided in future communications.

For more information about the funding deficit, valuation process and how the proposed reforms may affect you please see the additional information available on the Employers Pensions Forum website: http://www.employerspensionsforum.co.uk/.

Nigel Waugh

Director of Human Resources