Tag: deficit

Defending Pay and Pensions – Report from HEC, 13 October

UCU Higher Education Committee met on 13th October. Two key issues occupied the main discussion: pay and the future of the USS pension scheme.

HEC voted formally to call a conference on the 9th November for all HE branches to discuss the future HE industrial strategy and to form the pay claim. The conference will include a meeting for pre-92 university branches to make decisions on the union’s campaign to defend the pension scheme in pre-92 universities, USS. Both meetings will accept motions.

Branches need to meet urgently to submit motions prior to the 25th October deadline.

In this report:

• Pay
• Gender and equality pay
• Suggested motions on pay for the HE Industrial Strategy Conference
• USS Pensions
• The ‘deficit’
• Building the campaign
• Suggested motions for the USS Special Meeting

Pay

We need to ensure an industrial action strategy is developed which the union is prepared to properly back. Too often members see a union which does not campaign seriously for its demands, and offers a tokenistic reaction to employers offering below-inflation pay rises.

Following a series of on-off disputes, and last year’s below-inflation increase of 1.7%, our pay is continuing to decline in real terms. But we face new challenges. Intensified competition for undergraduate students following the HE Bill is creating upheaval in the English HE sector. Wales and Northern Ireland are suffering swingeing cuts, and the Scottish Parliament is expected to follow suit in December.

The Trade Union Act also makes winning national ballots more difficult. We have a choice: make the fight for pay part of a national political fight in defence of Higher Education or fight institution by institution against local managements limited by ‘affordability’, i.e. what they have left after spending on buildings, borrowing and Brexit contingency plans.

The “choice” between local and national disputes is a choice between accepting the parameters of austerity and breaking through. Across the public sector several unions are now rightly challenging the government’s 1% pay cap. We need to place our fight for pay in that context.

Gender and equality pay

The gender pay gap stands at an average of 12 percent across HE. It is particularly acute at senior levels. If we include casualised staff among female lecturers it can rise up to 50 percent. UCU has participated in the JNCHES working groups around gender pay and casualisation. While on gender this has have resulted in some recommendations, guidance and analysis overall there has been far too little action. 30 branches are now involved in gender pay audits. There was support for recognising the black and disabled pay gaps the latter being up to 30 percent. In the future, as a union we must plan to tackle pay gaps for all equality groups.

On casualisation (affecting 50 percent of teaching staff and at least 70 percent of research staff), again UCU has participated in JNCHES working groups but these have resulted in so little progress that UCU has withdrawn. This also leaves us in need of a clear strategy (including industrial action) to force employers to tackle these inequalities.

Bargaining guidance for branches campaigning and negotiating for casualised staff have been produced, although they are to be ratified by the hourly paid ratification panel before being published. Due to its importance in mobilising members the Anti Casualisation Committee voted to keep casualisation as a main theme of the UCU pay claim. This was ratified by the HEC.

A motion encouraging engagement, activism and participation in bargaining and negotiation for casualised lecturers was passed, making the most of alliances with the NUS and student unions, new free membership fees for students performing teaching, and the publicity of the anti casualisation roadshow. The slogan “break the pay cap, end the pay gap” can be our mobilising message.

Another important element of the pay claim discussed was workload. Pay is declining as a result of increased unpaid hours for full time and especially for fractional lecturers. In some post-92 universities the national contract provisions are at risk because hours are not provided for research and other ‘non FST’ activities.

This is a health and safety issue as well as a pay issue. Motions on these issues can be submitted for the special sector conference on 9th November (deadline is 26th May at 5pm).

Suggested motions for the HE Industrial Action Strategy Pay Conference

Break the cap: Close the gap

UCU notes

1. the support our pay equality campaign had in mobilising members
2. pay continues to decline in real terms and pay inequalities ensure those facing discrimination at work suffer more.

UCU resolves to

1. demand a pay claim with a substantial level of both pay rise and catch up.
2. launch a pay campaign with extensive public campaigning, stalls and meetings leading to an industrial action ballot for the beginning of 2018.
3. centre our campaign material around slogans linking breaking the pay cap with closing the equality pay gap, including Break the cap: Close the gap.

(82 words)

National response to punitive deductions

UCU notes

1. employers have resorted to punitive deductions for partial performance
2. such punitive deductions undermine members support if the union does not escalate its national action to deter individual employers from taking such action.

UCU resolves

1. in any industrial action ballot that explains the potential for punitive deductions to also explain the national action UCU will take if such actions occur.
2. use escalating national strike action where individual employers threaten punitive deductions

(81 words)

USS Pensions

USS pensions formed the second major discussion for the meeting. The threat to our pension scheme was universally recognised by HEC delegates.

We are in the fight of our lives for the future of our pension scheme.

This is not just an issue for older members – indeed the biggest attack will fall on younger colleagues. This fight is about stopping the USS trustee unwinding the entire scheme and replace it with an individual stocks-and-shares saving scheme called “Defined Contribution”. Defined Contribution is a long-term gamble on the stock market, whose performance will tend to have inferior benefits when compared like-for-like with a collective-based Defined Benefit. Any stock market crash will hit employees’ future pensions, and potentially, pensioners.

The 9th November meeting will form a central focal point for elected branch delegates to decide what form the industrial action should take, and to take stock and build a massive campaign. It is crucially important that branches put forward motions and send delegates to the conference.

We think UCU needs to escalate the publicity and get the message out. We need to launch a high-profile campaign in defence of our pensions. Pensions are not separate from pay: they are deferred wages.

The ‘deficit’

UCU needs to take a clear stand on the ‘deficit’. Members are being barraged with propaganda from the USS itself, the supposedly-neutral government body the Pension Regulator and ‘independent pension analysts’. We need to counter that narrative.

The fact is that USS is not in deficit in any real sense, and additional contributions or cuts in benefits are unnecessary. The so-called ‘deficit’ is a projected deficit that only arises as a by-product of projecting forward on the premise that the scheme is wound up! Since this ‘winding-up investment model’ (called ‘de-risking’ under USS’s Test 1 methodology) involves selling higher-performing stocks and shares and buying expensive and low-performing bonds and gilts, it actually means moving the assets into the class of investments hit hardest by Quantitative Easing and Brexit and likely to increase very slowly in value, if at all. Far from reducing risk, it would be self-defeating.

UCU has challenged this valuation method but we need to explain the critique to members.

Working for UCU, First Actuarial have showed that USS is balancing its books. Income and expenditure is projected to match very closely for the foreseeable future. The entire scheme would pay for itself without a need to touch the assets. This means that there is no need to ‘de-risk’ now. Keeping the scheme as it is not only benefits members but is key to maintaining stability in the scheme. USS has gone from being a better scheme than TPS to being worse.

The pressure from the Pension Regulator to value the scheme in a ‘recklessly prudent’ manner arises from rules introduced by the then Blair Labour Government which, ironically, were supposed to protect private sector pensions. But a greedy private sector pension industry has used them to attack the terms of pension schemes, first closing Final Salary and then moving employees from Defined Benefit to Defined Contribution schemes. Many private sector workers have seen their pensions cut drastically.

We should not underestimate the role of past governments in introducing rules which have – far from protecting private pensions – undermined the basic employer pension. We should be demanding that the Corbyn-led Labour Party both critically examine whether these regulations have led to a perverse outcome and argue that the pension industry, like housing, should be regulated in the interests of the members of the scheme.

Building the campaign

UCU Left put forward a motion which was passed in an amended form, calling for a national high-profile campaign in defence of pensions. This needs to begin now. Simply dropping an industrial action ballot on members without a publicity campaign, as was done in the e-consultation, is a risky gamble. Moreover, members are reading stories in the FT and THE referring to the deficit as real or inevitable. Most of all, being bounced into a vote does not lead members to have confidence in UCU’s willingness to lead a campaign. Branches need to organise members meetings to debate the future of the USS now. In branches where this has taken place members are convinced of the need to take action to defend our pensions.

As with the e-consultation, which continues until Wednesday, the dispute will be declared formally against our employers, who are refusing to pay more into the scheme, meaning that either employees pay more or receive less. Some, like Southampton have come out publicly in favour of a fully individual DC scheme.

Our industrial action should be inspired by the methods of the successful strike currently underway at Leeds University, where three days of strike are combined with campaigning and debating with students. Members are involved at every level. Their ‘Striking Insights’ teach-outs have proved hugely popular in building the campaign for reclaiming the university.

If our pension campaign links with the campaign to abolish student fees and debt, alongside cutting VC’s pay and ending the marketization of HE, we can effectively resist the cuts to our pensions.

Pensions are our deferred wages. We need to campaign for pensions and campaign for a publicly funded and accountable higher education system.

Below are draft motions available for branches to put forward from their branches to the two conferences on pay and pensions on 9th November.

Suggested Motions to Special HE conference on USS 9th November

Campaigning alongside other disputes and campaigns

This conference believes

1. Working with other unions in disputes and combining our campaigning alongside other unions in defence of pay, pensions and jobs strengthens our own USS campaign.
2. Creating solidarity networks with students and community campaigns provides a further avenue for building solidarity.

This conference resolves

1. Organise public pay and pensions rallies across the UK, stalls and public campaigns across the UK to campaign for pensions.
2. Seek to involve UCU members in FE and PCS and CWU workers in our campaign and rallies. Similarly invite student unions and community campaigns to support our public events defence of pensions.
3. Seek to organise, where possible, joint strike action alongside Further Education, PCS and CWU strikes.

(124 words)

Challenging the terms of debate

This conference believes that

1. USS reports on the basis of its real assets: a surplus of £5bn.
2. The reporting of a deficit is a recklessly prudent artificial construct ideologically driven by changes in accounting reporting regulation.
3. Constructing deficits has provided an ideological justification for the privatisation of collective Defined Benefit pension schemes and movement into individual Defined Contribution pension schemes.

This conference resolves

1. To reaffirm that UCU does not accept the methodology that creates the ‘gilts plus’ deficit.
2. To state publicly in our literature we do not believe there to be a deficit and not to seek additional contributions from employers to pay for the constructed deficit.
3. To refuse to accept detrimental changes to the USS pension scheme.

(129 words)