Responding to the USS pension 2020 valuation employer consultation

A more detailed account and our suggested answers for the conslutation form can be found here. 

The changes being proposed to the USS Defined Benefit CARE Pension scheme are devastating and will undermine it. USS conducted a valuation of the scheme based on March 2020 asset values and projections. This peak-pandemic-panic valuation recorded a large deficit. USS Ltd now intends that staff and employers will pay for this projected shortfall by making additional contributions, termed ‘deficit recovery contributions.

Aside from the injustice of charging costs without good reason, these additional contributions are so large as to make the pension have a net negative value for money. We will likely pay more in employee contributions than we will get back later in pension. A pension scheme like this is unsustainable, staff will leave the scheme, risking rapid shutdown, potentially even meaning that existing pensions will not be honoured. The very catastrophe that all the actors involved – USS, the Pension Regulator and UUK – say they wish to avoid will come to pass.

Although the employers’ organisation UUK had previously voiced support for UCU’s call for a new valuation of the scheme, based on more up-to-date and credible assessment of assets and future values, one day after USS announced their refusal of this rational step, UUK launched this consultation.

We therefore believe that this consultation is ultimately a propaganda exercise attempting to present the USS Defined Benefit scheme as irredeemably broken and pave the way for cuts, possibly ending up in a poor value ‘Defined Contribution’ scheme (in essence, an investment portfolio with no guarantee of a pension on retirement). Despite our success in holding off the threat over the last two years, we face yet another attempt to change the scheme.

We believe that every employee – including the lowest paid and most casualised staff – has a right to earn a living wage and be permitted to retire securely. Your pension is a deferred wage and should be protected.

The consultation UCL has launched makes two untrue assumptions:

1. There is an actual financial crisis in the USS Defined Benefit scheme (a 'deficit') that requires urgent action to avoid an outcome where staff pensions would not be paid.
2. That reducing benefits or increasing contributions still further could avert this crisis.

We have prepared some detailed advice on how to respond to the USS 2020 valuation employer consultation, which also contains links to the survey itself.

Note that the closing date for the consultation is this Sunday, 16 May 2021.

Finally, we draw colleagues’ attention to the calling of an open national meeting on USS Pensions on June 1st, in advance of the UCU HE Sector Conference.

6pm Tuesday 1st June

USS: Organising The Fight Back

Click here to register

Speakers include Sam Marsh (Sheffield), Sarah Joss (Herriot Watt), Tim Wilson (Dundee), Marion Hersh (Glasgow)

Organised by the UCU Solidarity Movement

Please forward this email to colleagues, whether union members or not. Pensions, like wages, are everyone’s concern.

Click here to join the UCU.