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UCU Strike: The University’s Response

Jacqui Marshall, Deputy Registrar & Director of People Services and Global Partnerships, and Andrew Connolly, Chief Financial Officer, pen the University's response to Exeposé's UCU stance

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Image: University of Exeter

We fully recognise the importance of pensions savings to our colleagues and their families. The USS includes in its membership virtually all academic staff at Exeter, and more than 1000 professional services staff. We understand the concerns that staff will have about the sustainability of this national scheme and the impact of any proposed changes. We want to be sure that staff and students are clear about the reasons for the proposed changes, which are the background to this national dispute.

The key points are these:

• Since this is a national pension scheme, the University cannot act unilaterally. Universities UK, representing universities, have proposed changes necessary to address the scheme’s significant funding challenges and to put it onto a sustainable footing for the long-term.

• The proposed pension reforms still represent a very competitive pension for staff, with universities continuing to make contributions of 18 per cent of salary and staff contributing 8 per cent. Defined Contributions (DC) schemes are widely used by employers across many professions. Universities will be contributing more than three times the national average employer contribution to DC schemes (according to a 2016 government survey).

• Any proposals for reform must be agreed by both the independent USS Trustee Board and the Government’s Pension Regulator. The Regulator must be satisfied that the scheme is sustainable and able to meet its existing commitments to current and retired staff. Conversations between the USS Trustee Board and the Government’s Pensions Regulator have been continuing during the valuation process. The Pensions Regulator has expressed its concerns over the future of the scheme and has advised USS that the level of risk should not be increased. In view of this, it is unlikely the Regulator would accept UCU’s proposal.

• The gap between the pension scheme’s assets and the amount it needs in order to pay pensions built up to date (the “deficit”) has increased from £5.3 billion (at the 2014 valuation) to £7.5 billion in 2017. It is clear that previous changes to USS have not stabilised its funding and that further reform is required.

• The alternative proposals put forward by the University and College Union (UCU) would represent a significant increase in contributions for both employees and universities. Even if this were affordable for individual staff (for example, a lecturer working at Grade F would have to pay £1000 in additional contributions each year), universities would not be able to increase employer contributions without making significant reductions in investment in education and research, resulting in reductions in staffing.

• All pension entitlements built up to date are protected in law – any changes will only apply to pension savings that commence after any changes have been made, the proposed date for which is April 2019.

Discussions between Universities UK and UCU have continued at national level for over a year but it has not been possible to reach an outcome acceptable to all parties and a decision was made at the USS Joint Negotiating Committee (JNC) on 23 January 2018 on the casting vote of the independent chair.

We are satisfied that UUK has explored all options and that the changes are necessary to put the scheme on a sustainable footing for the long-term, while continuing to offer attractive pensions to staff, now and in the future, and ensuring that contributions remain affordable to both staff and employers.

We regret that the current situation has escalated to the point of national industrial action and we hope that a resolution can be found before this takes effect. However, we have taken a number of steps to ensure that academic outcomes for students will be unaffected. Whatever your views on the pension situation, we urge you to continue your focus on your studies, to turn up to your timetabled sessions as normal and to submit your assessments on time.

Read the original Exeposé piece here, and the Guild’s response here.

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