Reminder for General Meeting, Thu 1 October 3-4pm, USS update and motions for debate

To register to attend via Zoom please RSVP using this form.

The meeting is timed to also allow members to attend UCL’s Town Hall Meeting on the USS Pension valuation at 12:30pm. 

We have received two motions for debate, see the Appendix below: 

1. An emergency motion on the current USS valuation and threat to pensions;
2. A local branch motion calling for a campaign of solidarity between staff and students and to support a UK-wide Staff / Student Assembly. Colleagues will be aware of the difficult situation facing students in Manchester, Leeds and Glasgow.

If you wish to propose an amendment to either of these motions, please reply to this email. Amendments will be pre-circulated ahead of the meeting.

We are seeking delegates to the two-day online Congress and the one-day online HE Sector Conference. We are entitled to eight delegates at each conference.

If you are interested in attending, please reply to this email.

USS update

Colleagues are encouraged to attend UCL’s Town Hall meeting on pensions and then join the debate at our EGM.

The current financial shortfall in the USS DB scheme is due to USS’s assets invested in the stock market falling in value. By employing a short-term ‘mark to market’ valuation method, a drop in current asset prices creates a larger theoretical deficit between the cost of paying out all pensions, and the assets of the scheme drawn down to pay them. As we noted in the 2018 and 2019 disputes, this ‘deficit’ is artificial unless the scheme were closed overnight.

Were no action taken, pensions would continue to be paid. Colleagues may recall First Actuarial’s 2017 analysis that showed that USS was able to continue to pay its pensioners for decades, by simply taking the money paid in and paying it out again without touching the assets. 

Had new pensions been moved to 100% Defined Contribution (DC), as USS was urging in 2018, these new pensions would be at risk. Colleagues with DC scheme benefits are seeing direct cuts in their asset values. In the USA, stock market falls have wiped out pensions. What is stopping a run on our actual pensions is the Defined Benefit "Employer Covenant" (agreement to pay the pension) built into the scheme.

Were USS to sell its stock and ‘de-risk’ now, it would likely be selling its assets at low prices. It is notable that USS’s own Technical Provisions consultation document recommends not doing so.

The last run on the stock exchange was in 2008. USS lost asset value in the short term, and then recovered within a couple of years.

If the Government had conceded a Guarantee to back the Employer Covenant, as UCU had urged, USS could simply go back to the Treasury and ask them to insure against the risk that investments take a long time to recover in value.

We do not know what will happen to the world economy in the long term. But pensions are future pay, and irrespective of the valuation methodology used, we must resist any suggestion that we should sacrifice our pensions for the pandemic! 

The biggest impact of any changes will fall on the youngest, and future, staff.

A late motion for the UCU’s Higher Education Sector Conference is attached below in the Appendix.

UCL UCU Executive Committee

Appendix

Local Branch Motion - Building Support and Solidarity with Students

UCL UCU notes

1. Over 40 universities reporting cases of Covid-19 among students.
2. Students in halls of residence being locked down en masse, and uncertainty as to whether they can return home or seek rent reimbursements.
3. Universities used the promise of face-to-face teaching to encourage students to come to halls in the first place.
4. Risks to staff, students and the local community of Covid-19 community spread predicted by iSAGE, UCU and others.

UCL UCU resolves

1. To build a practical network of support and solidarity towards our students, and to approach other campus trade unions and SU to support.
2. To support the call for a UK-Wide Staff-Student Assembly on Saturday 10 October initiated by the UCU Solidarity Movement, and similar initiatives in the future.

HESC Motion - Defend our USS pensions: put pressure on employers 

Conference deplores the unnecessary valuation during the Covid crisis with proposed total contributions of 41-68% (potentially, member contributions of 14-20%).   

Conference notes:

1. USS's DB scheme can pay pensioners from income for 25-30 years without touching assets 
2. USS has recovered from past stock market falls 
3. Closing the scheme to new entrants forces staff into risky DC schemes 

Conference resolves UCU will campaign for employers to  

1. commit to (at minimum) the existing DB scheme maintaining current member contributions and benefits, and
2. join UCU in pressing for valuation methodology changes, including 30 years for 'deficit' recovery, at least 65% growth assets, cash flow approach and reasonable prudence - or, alternatively, for employers to cover increased costs.  

Failing this, Conference instructs HEC to call a dispute with employers, initiate an IA ballot and call a December/January Special HE Sector Conference to review campaign progress and wider impact on HE pensions and the sector. 

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