23 March 2018

USS: Now we’re talking! Time to fight for #NoDetriment

By Sean Wallis – vice president, UCL UCU and UCU NEC member

Dear colleagues

We are on the brink of what may turn out to be an historic victory in USS.

We have come a long way from 100% DC being imposed. Mass strike action by our members took us here. The threat of mass strike action in the future is what is motivating the employers now.

But there is an obvious risk in the current proposal.

Fundamentally, the agreement does not prevent the employers agreeing to set up a panel, and then, when USS’s books are opened, find an even bigger deficit, come back in a year’s time and then railroad through changes in the scheme.

The key issue is the following bullet point.

  • The panel will make an assessment of the valuation. If in the light of that contributions or benefits need to be adjusted in either direction, both parties are committed to agree to recommend to the JNC and the trustee, measures aimed at stabilising the fund to provide a guaranteed pension broadly comparable with current arrangements.

The problem with a new arrangement “broadly comparable with the existing arrangements” is that it is not specific.

How broad is “broadly”? Is a DC scheme “broadly” comparable with DB?

The employers seemed to think so in January. AON was engaged to report that 100% DC was only 10-20% worse than the existing DB scheme. PWC threatened dire problems in the scheme.

We are in an extremely strong position to push the employers one important stage further, as below:

  • The panel will make an assessment of the valuation. If in the light of that contributions or benefits need to be adjusted in either direction, both parties are committed to agree to recommend to the JNC and the trustee, measures aimed at stabilising the fund to provide a guaranteed pension whereby employees neither pay more nor receive less than the current arrangements. To achieve this the employers will either pay more into the pension scheme, extend their temporary line of credit, or reach an agreement with the government to support the scheme.

We propose therefore that as it stands the offer Not Be Put to members by e-ballot. Instead the negotiators should go back into negotiations on this point.

If it is put out to members by e-ballot then there will be no chance to nail this down. First one negotiates and then consults. So consulting would delay resolution.

The negotiators should go back to the employers and insist that they agree that there should be no detriment to members as a result of this new valuation process.

For 30 years we had Final Salary. #NoDetriment was the norm.

In the last two valuation rounds we have had two severe detriments. I see no basis for accepting detrimental changes to USS, now or next year.

Let’s nail this down now. If the employers accept this they get one further advantage to them. If they meet our claim in full, we don’t need an e-ballot!

We will simply have won, and our ballot mandate will then end.

By Sean Wallis – vice president, UCL UCU and UCU NEC member

5 comments

  1. Kevin Doogan said:

    The argument in Bristol that has had much more traction than it deserved was that the other players in the drama, the USS Board and the regulator, will determine the outcome of the dispute. In this account we have been shadow boxing with the employers when the real action is elsewhere. In my view it is highly unlikely the USS board and the regulator will scupper this proposal. We have to insist the fight is with the employers.

    23 March 2018 at 8:39pm
  2. Chris Graves said:

    Sean – work and data in cardiffucu indicatea no deficit will be found if validated methodolgy is used – this is what proposall will ensure

    23 March 2018 at 9:28pm
  3. Chris Graves said:

    Our Woon Wong @cardiffucu shows more likely outcome is worst case scenario no deficit – sensible scenario pension in profit

    23 March 2018 at 9:34pm
  4. Alex Owen said:

    You focus on paragraph 5 of the UUK proposal without reference to the second part of paragraph 4:

    “Recognising that staff highly value Defined Benefit provision, the work of the group will reflect the clear wish of staff to have a guaranteed pension comparable with current provision whilst meeting the affordability challenges for all parties, within the current regulatory framework.”

    Which I think explains that UUK accept the fact that staff do not see DC as broadly similar to DB.

    23 March 2018 at 11:28pm
  5. Peter Dwyer said:

    I have no doubt the panel will reflect the wishes of members. The best way to do that is to clearly and simply say any new settlement will be as good as the status quo. This statement does not do that. If they can’t do that now, why should we trust them to suddenly agree it behind closed doors?

    24 March 2018 at 8:51am

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