USS – thoughts from off the campus

Cambridge colleges.jpg

The situation at USS is like a medieval siege, where both sides are at Parlez. The threat of violent action has not gone away, but the talking holds some hope of a resolution.

Since the nuances of those talks are too intricate for this blog, I will try to hold your interest with some general thoughts, based on my being a parent of a second year undergrad, a friend of a few who are on strike and a tax-payer. This doesn’t make me unique, but I have followed what has gone on so far, closely enough to have some opinions.

The current position.

Having rejected the ACAS offer of March 12th, the UCU are awaiting something better, UUK are conditionally agreeing to go back to the table

‘Employers have indicated their support for this proposal, however, this is conditional on the suspension of industrial action.’  universitiesuk.ac.uk/news/Pages/USS

As I’ve mentioned in previous blogs, there are aspects of the 12th March agreement which are very unpalatable to university teachers, a 2.5% cap on pension increases, a lower accrual rate and a lowering of the pensionable earnings on which pension are accrued.

But the UUK offer is a long way from the 100% individual DC offer it started with, and the UUK are putting a lot of store in the creation of a long term pension ACAS, in the shape of a standing committee looking at funding issues.

There does not appear to be sufficient trust between the sides for the UCU to call off the threat of strike actions, both sides to put matters in the hands of a supposedly independent committee or for social media to be rid of the #UUS hashtag!

 

Ways forward

UUK has mentioned that CDC could be a solution but it hasn’t proved to be (yet). Many lecturers  (rightly) see CDC as an upgraded version of DC and not a substitute for what they went on strike for. The covenant between UCU members and UUK includes a DB promise (in their opinion).

My colleague, Hilary Salt, who advises UCU , has publicly floated the idea of a “negative pledge” as an innovative solution. Such a pledge would involve some of the University assets being pledged , not as “contingent assets” but as “unmortgageable” and therefore potentially available to USS in a dire calamity.

This approach has merit in that addresses the Pensions Regulator’s fundamental concern with the USS’ current funding position – that should it deteriorate, there is no long-stop but the PPF.

It seems most likely that any resolution to the long-term issues that have brought both sides to such conflict , must involve the Pensions Regulator, which guards the interests of the PPF and to some extent the tax-payer (the other recourse is of course higher tuition fees).

Personally, I find the idea that even under a last man standing scheme, that our universities could go bust because of pension promises, absurd. The UUK has boxed itself into a corner in projecting itself as a commercial entity, quite clearly – universities are different.

Which is why I support university teachers being paid differently – a higher proportion in deferred pay, a lower proportion in “pay at risk” or bonus.  As Rebecca Leach has pointed out on twitter, the bonus culture for academics doesn’t stretch much further than likes on twitter.

The flattening of all pay negotiations into overall reward, with pensions simply regarded as a cash flow item, entirely ignores their very real differences in career expectations and aspirations.

 

 

 

 

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 and tagged , , , . Bookmark the permalink.

2 Responses to USS – thoughts from off the campus

  1. Peter Tompkins says:

    Very well reasoned. I’m pleased to see you say this.

    For years it has been a given in the HE sector that salaries aren’t that great but you get a good pension promise at the end. A bit like the health service but moreover it’s got some funding behind it. So it should be more manageable than the unfunded promises made to doctors and nurses.

    This whole USS saga has started with the argument that the funding costs of past promises have become too great. As if slashing academic pay (the pensions bit) solves any underfunding for the past. The actuarial valuation basis is a complete red herring to the discourse on the direction of the academic reward package.

    The truth is that UCU members have been promised benefit x (DB) per year of service and they are being asked to accept y (< x) for future work. It’s a pay cut however your actuary values it. And I would be angry if they offered to cut my pay.

    Liked by 2 people

  2. Kevin Wesbroom says:

    Just a thought. If we called it Target DB Pension, rather than CDC would it be more acceptable to UCU???

    Like

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 )

Google+ photo

You are commenting using your Google+ 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 )

Connecting to %s