September 2018

AT the General Meeting on 19 September, members heard a report from David Watts, AUCU Pension Officer.  The slides from his report are available to view here.

 

November 2014

David Watts, AUCU Pensions Officer

Now that the USS industrial action has been suspended for negotiations, I thought it might be worth sharing with you my personal understanding of where we are.

 

Many colleagues are justifiably angry at the employers’ proposal to close the final salary (FS) section of USS. Concern has also been expressed to me that UCU’s negotiators have tacitly accepted that this will happen, and that we FS members will get lumped into the inferior Career Revalued Benefits (CRB) section. For me, there are three issues here: principle, operational and financial.

 

The principle issue is that FS and CRB are both defined benefit pensions: we know what proportion of our salary we pay in and how our pension will be calculated, so we can work out what we’ll get. A top priority for UCU’s negotiators is to ensure that USS remains entirely a defined benefit scheme. Because both FS and CRB are defined benefit pensions, UCU has no objection in principle to either. FS is elegant in its simplicity: we pay in 7.5% of salary and, for each year we pay in, we get 1/80th of our final salary per year after retirement. CRB is more arcane: we pay in a percentage of salary (currently 6.5%), but then for each year that we pay in, 1/80th of that year’s salary is added to the pension that we’ll get when we retire. This amount is then ‘revalued’ (increased by a percentage) each subsequent year to offset the effects of inflation.

 

This raises the operational issue. With a defined benefit scheme, the percentages and fractions that are used to pay in, accrue and, in the case of CRB, revalue our pensions are vital. Moving any one of them up or down will have an impact on our pension. The problem with the current CRB section is that these numbers are set at levels which produce a smaller pension than that produced by the FS section for the same number of years’ service. There is no reason in principle why, for the CRB section, the proportion of salary paid in, the fraction of salary added to our pension, and the revaluation rate applied to that accrued pension, should lead to a pension inferior to that provided by the FS section for the average member. The problem is that these factors were set too low when it was introduced and the CRB scheme, as currently calculated, will inevitably lead to an inferior pension. This is why UCU negotiators have argued that the accrual rate for the CRB section should be increased to 1/70th of annual salary. This would be a significant improvement for colleagues in the CRB section, though it would still not match the pension generated by the FS section.

 

This is where the financial issue comes in. USS is a ‘funded’ scheme, meaning that it has a set of assets (securities, cash, etc.) from which it pays out retired members’ pensions. This sets USS apart from the Teachers’ Pension Scheme (TPS), which has no funds at all; instead, TPS retired members’ pensions are paid by HM Treasury. There is no consequence for TPS if contributions from members and employers do not cover the pension obligation – the taxpayer funds any difference. It is worth noting that TPS is not just the school teachers’ scheme, it is also the scheme for post-1992 universities and some pre-1992 universities recognise the need for any USS changes to make the scheme competitive with TPS. USS, however, must be able to make enough money, from contributions by working members and from returns on its investments, to cover all its liabilities, chief of which are the pension entitlements built up by members. We are all, therefore, capitalists by proxy, because payment of our pensions will depend, to a certain extent, on how much return USS thinks it can make by investing our contributions.

 

And here’s the nub. USS doesn’t think it can make enough money to continue paying pensions at the level set for the FS section. UCU does not accept the means by which USS has calculated this funding deficit, and the current negotiations will involve getting the USS, UCU and UUK actuaries together to discuss this. However, by engaging in negotiations of this kind, UCU has had to accept, as do we, that the level of our USS pensions will ultimately depend on the size of USS’s assets.

 

There are ways of increasing those assets. USS could invest in higher yielding, though higher risk, investments. However, their current investment strategy is to move gradually from higher to lower risk assets, meaning that USS funds will grow less quickly than hitherto. Another way to increase USS assets would be for us to pay a higher percentage of our salary towards our pensions. However, the universities don’t favour this because it will lead to an increase in the overall size of USS and thereby to the share of liabilities they would be left with if USS were to be wound up. It is not clear to me how this particular circle can be squared. However, UCU has made it clear that it wants any USS settlement to be fair and affordable for members.

 

On this basis, I support and am happy to defend the stance taken by our negotiators: the defence of USS as a defined benefit pension scheme; the principle of fairness, with an end to two-tier pension entitlements (bear in mind the proportion of scheme members in the CRB section is now 30% and will become the majority in a few years); and the improvement of the accrual rate for the CRB section. These seem to me the right priorities for now. This does not mean that we, or our union, should simply accept that our future pension entitlements will remain lower than those currently provided by the FS section. However, for the reasons given above, I do not believe that that battle can be won at a time when USS is generally agreed to be in deficit. Instead, we will need to return to this issue when the yields on government securities have risen from their current levels, which have been reduced to near or below zero by the government’s policy of quantitative easing.

 

August 2014

David Watts, AUCU Pensions Officer

It looks unlikely that UCU will be able to reach a negotiated settlement over the future of our pensions. Further changes are being sought that could have serious consequences for the pensions of all Universities’ Superannuation Scheme (USS) members, regardless of which section we belong to. It is possible that we will be balloted on industrial action this autumn in order to protect what is, in the final analysis, our deferred pay.

These notes set out my personal understanding of the current state of negotiations over the future of our pensions. I have tried not to assume that everyone is familiar with how USS works; but have produced a few headlines for those who are. I have also tried not to editorialise. If you have comments or questions, let me know (d.watts@abdn.ac.uk).

Headlines

·The 2014 triennial valuation will show that USS’s finances are in worse shape than they were in 2011. This will result in pressure from the Pensions Regulator (tPR) to put in place a revised recovery plan.

·Employers will propose further changes to our pensions. These are likely to include:

1. Complete closure of the Final Salary (FS) section of USS for existing members.

    2. A salary cap on contributions to the Career Revalued Benefits (CRB) section. The proposed salary cap may be set at £40,000 pa.
    3. Anyone earning >£40,000 will receive an employer contribution towards a Defined Contribution (DC) pension scheme. DC schemes differ from USS by transferring the investment risk to the individual. The pension one accrues will depend on the investment performance of the scheme and not (as with USS) on years’ service in the sector.

·The chief UCU negotiator foresees no possibility for a negotiated settlement on the future of USS that will be acceptable to all parties (see dramatis personæ, below).

·UCU negotiators want us to tell them which aspects of USS are the most important to them, so they can build a negotiating strategy around them (see p.5 for details). Please let me know what your priorities are for USS. I can then collate them and pass them on to the negotiators.

·Nevertheless, it seems likely that we will need to take serious industrial action in order to prevent a significant deterioration in our USS pensions.

Context : the USS deficit

The triennial valuation in 2011 found that USS could only meet 92% of its liabilities (in the unlikely event that it was wound up).

As a result, tPR obliged USS to put in place a recovery plan to return it to being 100% funded. There are three main roads to recovery:

1Reduce USS pension benefits to members (i.e. us)

2Pay more into USS (us and/or our employers)

3Increase returns on investment. USS is unlikely to try to do this (see below).

In 2011, employers imposed the CRB section of USS. This is still a defined benefit (DB) scheme and, in principle, could be as good as, and for lower earners better than, FS schemes. However, the accrual rate for the new CRB section of USS was set at 1/80, making it greatly inferior to the FS section (though members’ payments into CRB are lower than into FS).

FS was retained for existing members, but with employee contributions raised to 7.5%.

The industrial action that we took secured the right to an unreduced pension on redundancy. However, this expires on 1 October 2014.

USS use 'gilts+' in order to estimate the scheme's overall funding level. (The funding level is an estimate of whether USS could meet its current and future liabilities if it were wound up). This is a very conservative estimation technique, which values the scheme primarily according to its gilts (government debt) holdings, which make up about 20% of the asset base. With the advent of quantitative easing (QE) in 2007/08, gilt yields fell to around 0% (<0% when adjusted for inflation). Thus, USS assets are, on the basis of ‘gilts+’, in decline. ‘Gilts+’ has, therefore, been argued to under-value USS’s assets.

The UCU actuary has proposed valuing USS on the basis of its actual assets. This produces a ‘better’ funding figure (i.e. closer to 100%) than the 'gilts+' method. UCU negotiators have pointed this out, and report that it has discomfited the USS Board. However, it is up to USS, and not the employers nor us, to chose the valuation method.

Because of the deficit, the Board is under pressure from tPR to 'de-risk' USS. This involves selling riskier equities, such as shares, and buying lower-yielding but safer government-backed securities, such as gilts. As this proceeds, the 'gilts+' valuation method becomes progressively more accurate.

When QE began, 14% of USS assets were composed of gilts. Because they want to ‘de-risk’ the scheme, USS have sold equities and bought more gilts, so that the asset base is now 20% gilts. USS has, in effect, reduced the funding level of the scheme (because gilt yields are currently 0%) in order to try to make it less risky!

In this context it is ironic, bearing in mind that USS is simplifying its investment strategy, that it has 56 employees on salaries over £100,000 pa.

In 2014, on the 'gilts+' method, UCU estimate that USS is likely to be about 85% funded (the ‘official’ funding level calculations are currently being finalised).

Dramatis personæ

UCU’s chief negotiator says that there are four main parties to the USS negotiations.

1.Us (represented by UCU)

USS exists to provide us with a pension (effectively deferred pay) when we retire. UCU has three representatives on the Board, who represent the interests of all USS members. The USS membership can be divided into two unequal groups, both in terms of size and the defined benefits of the scheme:

i.FS members - currently 80% but declining quickly as this section has closed to new members;

ii.CRB members, with greatly inferior benefits, whose number is growing quickly.

Both groups are represented in the membership of UCU, and both have a significant stake in USS’s future. UCU, therefore, will represent the interests of both groups.

2.Our employers (pre-1992 universities)

The employers are keen to keep their pension costs as low as possible. These currently stand at 16% of salaries (raised from 14% in 2008), but UCU negotiators have seen evidence that they aspire to reduce this to nearer 10%. However, Ernst & Young found recently that employers remain committed to the future of USS.

3.The USS Board

The Board has a legal obligation to make sure that USS can meet its present and future liabilities. UCU’s chief negotiator takes the view that the Board:

i.Is more concerned with meeting its legal obligations than with ensuring that the HE sector provides a good pension scheme that makes it attractive to work in.

ii.Has independent members drawn primarily from the City of London, who are likely to view the USS’s DB nature, and especially its FS section, as anachronistic, given that DC schemes are now the norm.

UCU negotiators observed that, whereas in 2011 the employers and the USS Board were both taking pretty much the same view, that is not so much the case now.

4.The Pensions Regulator

This body is charged with trying to ensure that pensions schemes remain solvent and are unlikely to go under, thereby resulting in a claim on the state. Thus, they are putting pressure on USS to return to being at least 100% funded.

Dealing with the USS deficit: pressure to reduce our pensions

The USS deficit has three components

1. Past service deficit

2. Future service deficit

3. De-risking strategy

UCU’s chief negotiator argues that, taking only 1 and 2 into account, it is possible to see a "negotiating range", albeit one that will be unpopular with both UCU and the employers. With the third (de-risking) factored in, he cannot. The reason for this is that, even if we all move onto something equivalent to the Teachers’ or Scottish Teachers’ pension schemes (TPS and STPS (was STSS)) and therefore close the FS section altogether, the blended (i.e. employer and employee) contributions required to eliminate the USS deficit and de-risk the scheme could be over 40% of the total pay bill. (Employers contributions to STPS are currently 16.48%)

As part of the process of putting together a recovery plan for USS, Ernst & Young (E&Y) visited the 80 largest USS institutions and a selection of smaller ones. E&Y found that they retain a strong commitment to USS, one that E&Y predict will last at least 20 years. E&Y also found that most employers could probably afford to pay up to 21 % of salaries towards pensions; some could afford 23-25%;but none could afford more. Employers dispute these figures but there does, according to UCU’s chief negotiator, appear to be some acknowledgement that they will have to pay more than the current 16% (perhaps up to 18%), at least in the short to medium term, in order to reduce the USS deficit.

UCU’s chief negotiator takes the view that the USS Board and the employers are actually not unhappy with the conservative valuation of USS deficit (on the 'gilts+' method), as it allows them to justify changes that they want to make anyway. In other words, by emphasising the financial precarity of the scheme, it becomes easier for them to justify a further reduction in our pensions.

Employers are likely to resist any proposal to raise employee (i.e. our) contributions in order to protect (FS section) or enhance (CRB section) USS benefits. This is because maintaining higher pensions on the basis of higher employee contributions would increase overall USS liabilities, and thereby increase this risk that the employers would have to contribute more in the event of any future deficit.

Another problem with USS for employers is that a long-term pension scheme, which keeps salaries lower than they might be if they didn't have to pay relatively high pensions contributions, can be a handicap when recruiting (e.g. research "superstars") from overseas, as the 'headline' rate of the salary could be raised if employers paid lower pension contributions for staff.

Forthcoming negotiations

UCU Congress mandated our negotiators to try to achieve a settlement for USS such that it resembles the settlement agreed for TPS. An equivalent, bearing in mind that TPS does not provide a lump sum on retirement, is a CRB accrual rate of about 1/64 or 1/65, compared to 1/57 in TPS. However, it should be borne in mind that the average employee contribution in TPS is about 9.6%, i.e. 2.1% higher than the current USS FS contribution rate and 3.1% higher than the current USS CRB contribution rate.

Key issues for forthcoming negotiations

1.Size of USS deficit, and the method used to calculate it

2.Deficit reduction period (e.g. 5, 10 or 15 years)

 

These two are not decided by UCU or the employers, but by the USS Board.

3.Past service indexation (if FS section closed altogether)

4.What CRB accrual rate should be used

5.What revaluation rate should be used for CRB: CPI+1? CPI+1.6? Level of cap?

6.What level should the salary cap (under the employers' likely CRB & DC hybrid proposal) be set at?

7.What other benefits could be negotiated on? e.g. death in service benefit.

UCU’s negotiators want to know what we want them to focus on in future negotiations and in any dispute. UCU’s chief negotiator thinks that we need to start from the position of reducing the difference between the FS and CRBsections of USS. His priorities are:

  1. Improving the accrual rate for the CRB section
  2. Improving the revaluation rate for the CRB section

Although members of the FS section would seem to have the most to lose, CRB members will also be adversely affected by the employers’ likely proposals. If employers propose a DB/DC hybrid, all USS members will have their CRB section contributions capped at an annual salary of (e.g.) £40,000. Anyone earning more will then be obliged to take out a DC scheme if they want a larger pension. Moreover, CRB members have the most to gain if the negotiating strategy suggested by the chief negotiator is the one followed, as it would focus on improving the accrual rate and enlarging the revaluation rate of the CRB section.

***********************************************************************

July 2014

1. SUMMARY

 

Negotiations are about to commence in earnest about the future of your pension.

 

In 2011, the formal triennial valuation of the USS pension fund led to the USS Board declaring a deficit. Changes to the scheme’s benefit structure were imposed.

 

All the indications are that the USS Board will declare a considerably increased funding deficit when the 2014 triennial valuation is finally set. This will mean further changes to the scheme. It is inconceivable that the employers’ contributions will not increase from the current 16%. It is also clear that, just as we predicted in 2011, further changes to the benefit structure will be considered as a means of dealing with the current deficit and future worries about the funding base of the scheme.

 

This briefing aims to:

·Explain who are the lead actors involved in the scheme

·Recap on the position reached in 2011

·Indicate why UCU has challenged the methodology of pension fund valuation

·Provide an overview of some of the changes to the pension scheme under discussion

·Indicate that collective action may be necessary to improve our negotiating position.

 

2. WHO IS INVOLVED IN SHAPING THE USS SCHEME?

 

There are four key actors with a considerable influence on these negotiations:

·The USS Corporate Trustee (the USS Board)

·The Employers

·UCU

·The Pensions Regulator (tPR)

 

The USS Board comprises four Directors nominated by UUK, three by UCU, and five ‘independents’ (mostly from City institutions). Their primary concern is to ensure that the pension fund has enough money to pay out the benefits that have already been accrued. In particular, the independents may well view defined benefit schemes as unsustainable and final salary schemes as a quaint anachronism.

 

The Pension Regulator has statutory objectives but, in short, they are concerned with protecting the accrued benefits of members and reducing the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (PPF). There are very few funded defined benefit schemes still open, which makes USS unusual. But because it is by far the biggest, with funds of over £40bn, it is the subject of intense scrutiny by the regulator. The regulator is highly cautious and conservative.

 

3. THE POSITION REACHED IN 2011

 

On 10 May 2011, detrimental changes were finally forced through the USS Joint Negotiating Committee (JNC) against UCU’s wishes.

 

Although we were successful in defending the position of the final salary scheme for existing members, there were some changes, including an increase in the contribution rate from 6.35% to 7.5% and removal of the right for members made redundant over 55 to retire on an unreduced pension. Flexible retirement provisions were introduced at the same time.

 

However, new entrants from 1 October 2011 would be offered a pension not based on final salary but a career-average scheme, based on an accrual rate of 1/80th, to be revalued each year by CPI. UCU did not object in principle to the introduction of a career average (CRB) scheme but we did have a problem with this particular scheme, particularly the accrual rate. It meant that there was a big gap between the expected pension of protected members and new entrants. We argued for an accrual rate of 1/65th.

 

At the time, we pointed employers and members alike to evidence that when employers create a two-tier benefit system, within a few years there is pressure to close the better scheme.

 

Our consistent view has been that the changes imposed in 2011 were not only bad for new entrants but that they also threatened the protection that we won for existing members. The gap between the schemes is so great that we pointed to the major financial incentive for the scheme to come back and force existing members onto the poor CRB scheme for their future service.

 

4. WHY IS THE USS FUND IN DEFICIT?

 

The funding position is derived by, at root, a simple concept: the cost of future benefits (liabilities) set against the assets of the scheme and the expected contributions made by the employers and employees plus the financial benefits derived from investment. Of course, there is an entire industry surrounding the assumptions made in calculating what is likely to happen in the future to both sides of the calculation.

 

What is clear is that in response to the so-called financial crisis, the government has extended its policy of “quantitative easing” which has resulted in the yield on government bonds (Gilts) sinking to an all-time low – in fact, fluctuating around zero.

 

The collapse of the Gilt yield has had a major and detrimental impact on the estimated funding level of USS as measured by a contested methodology, which posits Gilt yield as the key factor in estimating the value of USS liabilities. This is the principal reason why the funding deficit, despite the changes for new entrants, has dropped from 92% in 2011 to about 85% in 2014. The reported deficit is expected to be in the region of £7.5bn.

 

The situation is further complicated by the fact that the introduction of the new CRB section of USS in 2011 meant that the final salary section became a closed scheme. From this point onwards, the final salary section has had no new entrants (apart from returners with protected rights). Inevitably, therefore, contributions to the final salary section fall as the number of members reduce while the liabilities and costs falling due will increase as the ageing membership retires and claims pensions.The final salary section will, therefore, become more expensive per member to fund.

 

UCU has pointed out that this paper exercise bears little relationship to the real value of assets and liabilities. Gilt yields will not always remain at this low level. We have challenged the methodology, and your representatives have argued that the valuation approach being adopted by the USS machinery and their desire to de-risk the asset base is actually making the situation worse. In effect, the ongoing approach adopted by the USS Board and others makes it inevitable that detrimental changes are forced on to scheme members.

 

We have proposed a more sensible way of valuing the assets of the scheme; one based on the reality of USS’s investments, which would reduce the volatility of the funding position as assets and liabilities would be linked. On this occasion it would also reduce the deficit but that is not the principal reason for proposing the shift in methodology.

 

But the political reality is that we are fighting against a methodology that many would argue, with justification, is deliberately designed to create the conditions for defined benefit schemes (yet alone final salary schemes) to close. Throughout the pension landscape, over and again, we see defined benefit schemes being replaced with defined contribution schemes, effectively transferring the risk from the employers and the fund to the individual member but leaving big pension funds with enough cash to continue acting as big players in the city markets.

 

5. WHAT HAVE MEMBERS TOLD US BEFORE?

 

In the post-92 sector, the majority of UCU members are members of a different, ‘public sector’ scheme: the Teachers’ Pension Scheme (TPS). This scheme is backed by the Government and public purse. It does not operate as a private scheme, with investments, like USS.

 

Following from the big public sector pension disputes at the end of 2011, the TPS scheme introduced a career-average scheme for all new members. UCU argued that although the contribution rates in TPS were higher than in USS, the benefits available to our members were significantly better than those available to new entrants in USS.

 

Previous surveys of our USS members (over 6,600 responses) indicated the following trends:

·The majority of final salary scheme members were willing to pay increased contributions if it helped safeguard existing benefits;

·Career-average members were willing to pay increased contributions for improvements to their scheme;

·There was general support for introducing tiered contribution rates related to salary;

·There was support for the protection of the tax free lump sum which is automatically available to members of USS on retirement;

·A high priority was given to defending the position of those USS members who have the right to receive their pension without actuarial reduction if made redundant;

·A high priority was also given to the removal of inflation capping;

·There was no significant support for the creation of an enhanced section or sections of USS on the basis of an individual opt-in for a higher contribution rate;

·Many members were not aware that if the liabilities of the scheme increase then under the current scheme rules, the employers and employees in the ratio 2/3 to 1/3 would share the additional contributions (as a percentage of salary).

 

6. WHAT ARE THE CHANGES UNDER DISCUSSION?

 

UCU Proposals

UCU negotiators have followed the objectives agreed by branches. Our position has been to address the gap between the FS and CRB sections of USS. Last year we put a formal proposal to the employers that we should work towards broad comparability with the TPS scheme. We argued that:

 

“This could be achieved either by restoring a final salary benefit structure for all members of USS or by moving towards broad comparability between the CRB section of USS and the career average section of TPS.

 

UCU's understanding of broad comparability with TPS would be

1) An accrual rate and default lump sum which would provide a package of benefits of equivalent value to TPS with an accrual rate of 1/57

2) A revaluation rate based on CPI + 1.6%

3) The indexation of benefits in payment without an inflation cap.

In addition, UCU seeks

4) The extension of the current right to an unreduced pension on redundancy.

5) The equalisation of member contribution rates on a tiered basis.

6) A timetable for the costing, consideration and implementation of agreed changes.”

 

In submitting this proposal to the employers we were conscious of the difficult political, economic and negotiating environment and recognised that we may need to move towards the achievement of our objectives by a series of incremental steps rather than on the basis of a single comprehensive settlement.

 

USS Board’s Financial Management Plan

In response to the 2011 triennial valuation, tPR asked USS to develop a Financial Management Plan (FMP). The FMP is intended to be a comprehensive approach to the financial health of the scheme and will incorporate an independent review of the employers’ covenant to the scheme, an approach to deficit recovery and the fund’s investment strategy.

 

A review of the employers’ covenant was undertaken by Ernst & Young, who concluded that the covenant should remain healthy over a significant period and that employers had the ability (if not willingness) to pay increased contributions, if necessary. USS conducted a formal engagement with Universities UK (UUK) as the employers’ representative body, on their FMP. Their engagement paper, in essence, suggested that to deal with the past-service deficit, new technical assumptions, and crucially the desire to de-risk the investment strategy, would result in an estimated overall contribution rate for employers and members of 37.4% of payroll (at September 2013 figures).

 

This compares with current member contribution rates of either 6.5% (CRB) or 7.5% (FS) of salary and an employers’ contribution of 16% of salary. We know the blended rate (the employers and member contribution in both the final salary and CRB schemes) was last reported at 25.8%. In other words, under the scenario outlined by the USS Executive, this would leave about another 12% of payroll contributions just to maintain the existing schemes.

 

Based on this, the USS Board’s initial engagement paper to the employers suggested:

·An increase in the contribution rates (on the agreed cost sharing basis of 2/3 of the increase paid by the employers and 1/3 by members); and

·All members to have their future service benefits under the CRB scheme rather than the FS scheme.

 

Employer representatives exploring options

There is no set position from the employers, yet. We have not received a formal proposal on possible changes to benefit design. However, we have been informed that UUK (acting as the conduit between the USS Board and employers) will be consulting from July to September with employers on a range of issues, including an option for a hybrid scheme.

 

The example given was a hybrid career-average scheme to:

·Redefine the way that the salary link for past service is worked out from a link to the individual members’ final salary to CPI;

·All future service (for all members) to be based on a;

·Core defined benefit scheme modelled on the current career-average scheme for new starters up to a cap (the example given is £40k);

·Above the cap, members and employers could contribute to a defined contribution scheme;

·Employers would pay increased contributions of 18% to take account of the current deficit and if the funding situation improved would agree not to reduce their contribution rate below 16%, with any additional funds used to enhance scheme benefits.

 

UCU will test all proposals carefully with our independent expert actuarial advisers. We will test the effect of different proposals on a range of career pathways.

 

We will make the modelling of likely impact available to members.

 

However, there is little doubt that both the USS Board and the employers are considering solutions to the funding situation that will reduce the benefits available to members.

 

7. UCU AND COLLECTIVE ACTION

 

We know that the USS Executive will want their Board to finalise most of the arrangements this autumn, prior to a formal consultation with a view to implementing changes from spring next year.

Against this backdrop, your negotiating team expects to enter intensive negotiations between now and November on the future of the scheme. Our core objective is to maintain USS as an attractive scheme for members which is sustainable in the future. The employers’ proposals would significantly reduce its attractiveness when it is not necessary to do so.

 

We believe that it may be necessary for the union to take collective action to secure the best possible outcome to the negotiations. Strike action and the deployment of assessment and marking sanctions have to be contemplated. Letters will be sent letting employers know that we may need to declare a dispute if changes are forced through.

 

A series of briefings to update your branch officers are taking place at various locations between 18 and 25 July.

 

Arrangements are being made to call a special meeting of all affected branches on 18 September to consider any progress in talks and whether there is a need to conduct a statutory ballot for industrial action.

 

We shall, of course, update members on developments. We hope that a negotiated outcome will prove possible but the situation is serious enough that members should be aware that a dispute is a distinct possibility.