Why are university staff going on strike?

stuart croft

Stuart Croft  – VC Warwick


My son has started sending me the announcements he’s been getting from his University about impending strike. He’s at one of two Universities who have been leading the charge amongst employers calling for an end to DB accrual in the Universities Superannuation Scheme(USS). I’ve had to explain that the reason his teachers won’t be teaching him (something he’s paying for) is because of this dispute.

This morning, the Prime Minister will announce a review of the way that students meet the cost of their education, she’ll be doing at a time when students will be accruing expensive debt and getting very little for it. The timing isn’t great.

A few months ago, I wrote a blog called “Postmen want to strike – is it any wonder“. I made it clear that I supported the Postmen who wanted a “wage in retirement” and were rejecting offers of a cash sum at retirement. Not all postmen voted for a strike but 89% did – showing that pension freedoms (for them) came second to the keeping of a decades old promise.

I wish I could be as certain of my support for the members of the University Superannuation Scheme. If the Royal Mail and CWU had not reached a pension settlement, I would be. In some ways the financial case for keeping USS open for future accrual is stronger than Royal Mail’s. The Universities (UUK) present a strong covenant (whatever rubbish tPR has said about universities failing). The Universities can afford the future cash-flow and balance sheet implications (especially if they kept to a growth strategy on their investments).

But it now seems that (led by Oxford and Cambridge) the Universities themselves have dug in their heels.

For all this, I cannot write “lecturers want to strike, who can blame them” and this blog from the Vice-Chancellor of Warwick University is why.

I have no answer to the question “why are university staff going on strike?”

We are now only days away from a period of industrial unrest which I strongly believe could have been avoided and, with goodwill on all sides, could still be avoided.

I have been very public with my criticism of the pension valuation and the subsequent decision by UUK to advocate what is in effect closure of the defined benefit element of the USS scheme.

I do not believe that either party to the USS negotiation have exploited the full range of options which could have generated a meaningful pension for University staff without jeopardising the financial future of the sector.

I am therefore calling for an early return to negotiations, with a more open and imaginative approach from both parties. A return to active negotiations with a real willingness by all sides to explore every option would of course enable deferral of industrial action until those avenues have been fully explored.

In short, I question the need for the change in the valuation assumptions last autumn which gave rise to the scale of this challenge. Second, I would ask that consideration is given to options which would protect the less well paid in the sector and future entrants, perhaps by restricting DB to those in the national pay framework and placing the higher paid into a DC only scheme.

Thirdly, I believe it that instead of focusing on removing everyone’s choice on DB USS should look to give individuals the choice to opt out of DB where their circumstances make this less attractive e.g. some overseas staff.

Finally, I would suggest it is time for government to take as close an interest in pension provision as it does in other aspects of reward in this sector. This could be through legislation which enables risk sharing DC schemes or by underwriting pensions for everyone currently in USS in a way that is more reflective of government support for unfunded public sector schemes such as TPS.

I recognise that there is a deadline being demanded by regulators. But it is vital that we find a way of resolving an issue which will be costly, both financially and in terms of reputation, for Universities, the sector and – most importantly – its students and staff.





About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions, Royal Mail, USS and tagged , , , , , , . Bookmark the permalink.

5 Responses to Why are university staff going on strike?

  1. Sunil Chadda says:

    Hi Henry,

    Keep up the great work!

    I have pointed a number of staff from Bath University and Bath Spa University at your blog.


    Outlook for Android


    Liked by 1 person

  2. Helen says:

    I think the reason the university staff are going on strike is because they’ve been told perilously little about what is actually going on. On the one hand we have our employers exclaiming that the deficit is huge and unsustainable and on the other hand we have the unions saying that the figures have been cooked and they’re only doing it to push the risk onto us so they can take big loans they need for capital investment projects.
    I’ve learnt more about the situation from 10mins on your site than I have from anything I’ve read from either my employer or the unions (and I am now sharing it with my colleagues). Thank you for taking the time to write these highly informative articles – we can but hope clearer heads will prevail during the consultations. (Though I’m not going to hold my breath; I have re-started my contributions to my private pension in anticipation that my already reduced FSP will disappear into a puff of smoke and I’ll be left with a DC pension I have very little control over).

    Liked by 1 person

  3. henry tapper says:

    Thanks Helen, that’s very gratifying !


  4. Martin Evans says:

    Words fail me on the decision of UUK. They could have discontinued automatic cash from 2019. They could have brought in tiered employee contributions should a new lecturer pay the same 8% as a Vice chancellor. Instead they joined the race to the bottom because of the FRS102. When we were younger it was the AVR which mattered and now ….. Very good work by Ms Salt and your firm on this area.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s