USS pensions: prepare now for escalating strike action

Planet Pay & Pensions demonstration in London

We enter the new semester knowing, yet again, the resolve of UCU members to fight for the defence of higher education.

Our strikes before Xmas, involving 60 universities and 48,000 staff, were at similar levels – and often higher – than our 2018 strikes. Recruitment to the union is again rising rapidly and involvement on the picket lines and in the Teach-Outs demonstrates the return of the organising spirit that typified the action in 2018.

We now have a further 38 institutions balloting to join the action over USS and the ‘Four Fights one Dispute’ pay inequalities campaigns. These branches all voted overwhelmingly for action first time round, but did not exceed the Tory anti-union law’s 50% threshold for turnout. Escalation of the action to other universities and setting of further dates of strike action will continue to place pressure on employers to settle both the USS and pay inequalities disputes.

On 30 January, the Higher Education Committee (HEC) of UCU meets. It must sanction the call voted on by delegates to the Special Higher Education Sector Conference to launch a further 14 days of escalating action from mid-February over USS. HEC must also link this with the pay inequalities dispute by announcing the same 14 days for this dispute. There must be no wavering in our resolve to fight for the whole sector and leave no one behind in any settlement.

Members’ resolve should not come as a surprise to us, for the simple reason that the underlying problems besetting the sector are not being addressed. We may have knocked back attempts to abolish the defined benefit pension scheme but casualisation, excessive workloads and pay inequalities remain just as intensely as they did previously.

And, it was these issues and more that lay beneath the original USS strikes.

Debt-based Higher Education

The crisis in the sector is one of marketisation, leaving students with unsustainable debts, de-valued education and a workforce at breaking point.

The £9,250 student fee system has led to a speculative and unsustainable debt-driven expansion of the Higher Education sector across the whole of the UK. Even where there are no student fees, such as Scotland, institutions are acting as if they are in the English system and are chasing full fee-paying students from the rest of the UK and internationally.

The UK has adopted the US system of debt-based Higher Education, but it is in crisis just as it is in the US. The UK Government slipped out figures for outstanding student loans just before Xmas of £121 billion (already 87% of the total NHS budget) and expect this to rise to £450bn by mid-century.

The Financial Times on 29 December reported that US student debt has already reached $1.5 trillion, or 8% of GDP. Thousands of students will be left with unsustainable levels of debt and be forced into bankruptcy, just as is now the case in the US. Equally as bad, universities will go bust if the tuition fee is cut as the Augar Review recommended. This will leave thousands of students with an unfinished degree.

In 2019, the biggest private provider GSM London went bust, leaving 3,500 students with no degree or university to study in. The mis-named ‘Office for Students’ claimed it was none of their business, as they did not regulate the company.

Take the Initiative

We now have to learn some lessons. First we need to ensure UCU backs its members’ demands for action to stop the crisis in Higher Education.

This means defending our no-detriment and no-deficit view of the USS pension scheme. The USS valuation is a fraud, and we must not accept any settlement which fails to recognise this and ensure that no future deficit valuation can be artificially constructed. This means an end to Test 1, valuations based on real returns prudently adjusted and no shifting of risk onto members.

We also need to ensure there is no settlement over USS without a settlement of the ‘Four Fights’ campaign. We should not allow employers to play divide and rule.

UCU members also now need to take the initiative in the strike by organising locally and UK-nationally for a strike committee. The #NoCapitulation moment in 2018, when we stopped a sell-out, demonstrated the power of an active member-led union. We need to return to that momentum and ensure elected striking delegates are those taking the decisions on the future of the dispute.

Finally, we need to plan for our strikes by linking up with students, twinning with branches that are balloting to ensure they can join the action and organising branches to meet and vote on support for the 14 days.

JEP2: More Democracy needed

The Second JEP report was released on 13 December with no fanfare and almost no reporting. This is not a surprise as it is a damp squib failing to grapple with the crisis in USS. Whilst it quite rightly rejects ‘sectionalisation’ of the scheme as costly, the undermining of the collective covenant and the unravelling of a single pension scheme across the sector, it suggests regressive changes allowing ‘flexible’ pensions as something to consider.

Worse still, it completely fails to understand the disaster of governance at the heart of USS. Criticism of the involvement of elected members representing UCU members as a stakeholder is completely retrograde. The governance weaknesses it identifies has its origins in too little not too much democracy in USS.

The Second JEP Report would clearly be swept under the carpet by USS and UUK if it didn’t offer carrots to give them opportunities to undermine the scheme. We should not fall for this. UCU should make it clear the recommendations of the Second JEP Report are inadequate to settle the current USS dispute.

We want No detriment, No deficit and nothing less.

Carlo Morelli UCU Scotland President

Escalate to win the pay inequalities and pension fights




Strike to win - pickets and student supporters in Cambridge, 4 December 2019

Strike to win – pickets and student supporters in Cambridge, 4 December 2019

The five issues we are fighting on are inextricably linked. We need to escalate to win on all of them.

We are in a fight to defend the future of Higher Education from the effects of marketisation. The Four Fights pay and equality campaign is central to that fight and it’s crucial for all of us that we win it.

Download and get this motion passed in your branch.

The threat to the USS pension is serious. It could mean the death of a pension worth the name in the pre-92 universities. But as round two in the USS fight was brewing, we realised that we could not afford to fight on pensions alone. The Four Fights campaign on pay, equality, casualisation and workload is a necessary compliment to the pension fight, for several crucial reasons.

1.Pensions are nothing other than deferred pay, pay that employers and employees agree to hold back until we need it when our working lives are over. If we don’t halt the ten-year erosion or our pay, any victory on pensions is partial at best.

2. It’s not much use defending the pension scheme if large numbers of our colleagues are effectively excluded from it because they are in insecure employment. Combatting casualisation is essential to ensuring a new generation of entrants to the scheme and guaranteeing its future health.

3. If we’re fighting over what is fair and right, we can’t afford to ignore inequality. Our pensions are better than most, but they don’t look so good from the perspective of women whose careers have stalled through maternity breaks or of BAME colleagues who have been passed over for promotion.

4. Excessive workloads which threaten our health and sometimes our lives are the product of the huge numbers of redundancies seen in the sector over the last few years. We face a Hobson’s choice: you can survive to claim a full pension or you can keep your mental health, not both.


But the final reason that the Four Fights is necessary is the most important of all. It is about unity. Unity is our chief weapon – unity across the sector and unity across our union.

With the help of the anti-union laws, our employers try to divide us from each other and limit our resistance. Round one of the USS fight was a game-changer for our union, but it only involved members in pre-92 institutions. Post-92 members are not allowed to be in dispute over USS, but we are not bystanders. We all know that attacks on TPS pensions will intensify if they succeed in wrecking USS.

Levels of casualisation are mostly lower in the post-92s than in the research-intensive universities, but the cancer of precarious contracts is an issue for all of us. Inequality is a scourge across the whole sector, while workloads are rising to unmanageable levels everywhere. Pay unites us all.

That’s why the decisions taken by Sector Conferences and the HEC to wage the Four Fights simultaneously with the pension fight was correct. The law dictates that they are two separate deputes, but it can’t stop us fighting them together.

We have made an excellent start. Eight days of strikes in 60 institutions represents an impressive demonstration of our intent. Some branches are in one dispute, some in two, but we have refused to separate our fights because to do so would play into the hands of those who want to use marketisation to fragment our sector.


Now the crucial task is to escalate the action. The reballots in 36 more branches are absolutely central to a Second Wave. The employers will be hoping that Labour’s election defeat has sapped our morale and we fail to bring more members into the fight. But we always knew that we would have to escalate whoever was in Downing Street. Where possible we should follow the lead of Cambridge who have twinned with Anglia Ruskin to help them get the vote out. Kent can twin with Canterbury Christ Church, Leeds with Leeds Beckett and Leeds Trinity and so on.

Escalation is also about upping the number of days of action in the Second Wave. December’s Sector Conference voted for 14 days of USS strikes in February and March. The HEC due to take place on January 30th must now endorse that decision and call the same days for the Four Fights dispute.

Now is not the time for hesitation or cold feet. Linking the issues and uniting members in escalating action is the way to win.


Jo McNeill, University of Liverpool and Mark Abel, University of Brighton, Co-Vice Chairs of HEC

The Second Joint Expert Panel Report: Could try harder?

UCU London Demonstration (Pic: Guy Smallman)

The Joint Expert Panel: Could try harder?

The long awaited second Joint Expert Panel (JEP) report on USS was released on Friday 13th December.

The Joint Expert Panel was the outcome of the 2018 industrial action by UCU in response to the attempt by Universities UK (UUK) and the USS pension scheme Trustee Board and management executive to replace the Defined Benefit scheme with a wholly Defined Contribution scheme. The 14 days of strike action led to a compromise settlement, the withdrawal of the 100% DC proposal and creation of the JEP by UUK and UCU, chaired by Joanne Segers.

The first JEP report was widely recognised as a scathing criticism of the mismanagement of the USS scheme. The blame for the 2017 valuation and the largest strike in UK Higher Education’s history, which it generated, was placed squarely at the door of the USS Trustee Board and executive management, UUK and the Pension Regulator (tPR). The details of the crisis within USS have been debated widely within UCU by Sam Marsh, Mike Otsuka, Sean Wallis and the current author along with notable reporting by the Financial Times journalist Josephine Cumbo. This piece does not seek to rehearse these debates and any reader unfamiliar with the detail can look at a variety of sources to examine this history. Some useful starting points include:

In summary, the proposals in the First JEP Report provided a means to complete the 2017 valuation and reduce total contribution rates to a level below 30%. However, its most significant findings were rejected by USS’s Trustee Board and executive resulting in a contribution rate from employers and employees well above that identified by the first JEP report. This has led to a resumption of struggle: a second large strike ballot, renewed industrial action in November 2019, with more to come. The Second JEP Report slams the failure to adopt their proposals in full saying it represented ‘a missed opportunity to resolve the dispute and provide room for a discussion of the longer-term issues facing the Scheme’ (JEP, 2019, p.4)

The Second JEP Report, focusing upon the valuation methodology and scheme governance was expected to be as analytical in its findings, and in some ways it appears to be. However, in other areas the Second JEP Report seems to have failed to openly address the key barriers to change which could ensure that a stable, financially-secure pension scheme emerges in which the interests of the beneficiaries of the pension scheme, current and future pensioners’ and their dependents are foremost.

In the brief commentary that follows the key positive and negative points of the Second JEP Report are examined. All references, unless otherwise stated relate to this report.

Collectivity and Mutuality – A unique aspect of USS

JEP places a strong reliance upon the collective nature of the scheme. While the scheme has grown in terms of the number of employer bodies as members, the vast majority of the assets and liabilities continue to derive from a smaller group of pre-92 HE institutions. The expansion of membership while resulting in a more diverse membership body is not considered to be a risk to the sustainability of the scheme. Some 84% of the scheme liabilities are concentrated on the pre-92 sector (JEP, p.25). With this high concentration of liabilities comes a high concentration of contributions into the scheme. As a consequence there is a high level of confidence that the sector will, and should, continue for the foreseeable future as a primarily pre-92 pension scheme. In conclusion JEP strongly identifies the collective covenant and the insurance this mutuality provides as a major unique strength of the scheme.

Employer led proposals for ‘sectionalisation’ of the scheme are extensively examined in the JEP report (see chapter 10). Despite the benign name ‘sectionalisation’ is a means to break apart the scheme into a variety of independent schemes with differing contribution rates and member benefits. Sectionalisation could be at the level of groups of institutions or at the individual institution level. This would break up the core principal of mutuality and sharing of risks, it would increase costs, and it would fragment the sector. Why then is it even being considered? This is driven by larger employers identifying opportunities for more rapid expansion with greater debt financing in an environment where pension liabilities are reduced on their balance sheets. It reflects the increasing tendency of each university senior management team to see themselves as in cut-throat competition with other employers. JEP rightly rejects such proposals stating it ‘would have serious concerns were sectionalisation to be pursued.’ (p.92). Mutuality, and the associated collective covenant, is essential not only for the long-term stability of the scheme but also for member confidence that their pension contributions will lead to a future pension on retirement.

Affordability and Intergenerational Fairness

Member benefits and the affordability of the scheme is looked at within chapter 9. USS faces a relatively high drop-out rate from new members, ranging from 15-20 per cent of new entrants per annum (Fig 12). These members are disproportionately younger, with higher levels of existing debt and on insecure contracts. JEP tentatively examines alternative approaches to differential contribution rates ‘Tiered Contributions’ and reduced benefits for reduced contributions.

The continuation of the scheme with a positive cash flow is dependent upon the scheme remaining open to new entrants and the contribution rates being affordable to newer members of the sector. Current contributions can then be used to pay for existing pensions and additionally build up assets. These assets represent the intergenerational guarantee that future pensions can be paid for today’s active members. Thus, retaining the scheme as an ‘open’ scheme for new entrants is crucial to this approach. Making contribution rates more progressive towards lower paid staff has attractions in addressing affordability but not if it is at the expense of other members of the scheme. JEP assumes any reduction of contribution rates for low paid members must result in increases for other members. Thus JEP fails to recognise a key feature of the scheme – that it is currently not only cash flow positive but on USS’s own evidence in surplus. JEP does not come to a judgement about the current state of the scheme and instead states that;

‘It has been suggested by some commentators that by applying those same adjustments [contained in the first JEP report ed. note] to the 2018 valuation it would be possible to reach a combined contribution level of 26% with the deficit eliminated. The Panel has not undertaken such an assessment itself and cannot comment on the accuracy of this claim.’ (p.22).

Yet JEP has had access to the USS Joint Negotiating Committee papers which, in November 2018, showed that implementing the first JEP report in full on the 2018 valuation would result in a £0.6b surplus and a total contribution rate of 25.5%. That USS is in surplus is not a suggestion of ‘some commentators’ but the confirmed result of a valuation undertaken by USS based upon JEP’s own suggested valuation proposals in the First Report. Under these circumstances lower contribution rates for low paid members are feasible without increasing contribution rates for those higher up the pay scales.

JEP also examines proposals for members reducing their benefits for a reduced contribution rate, a so called ‘50:50 option’. Such an option is not a progressive change, rather a response to the lack of affordability of pensions for low paid, often women in HE. A 50 per cent contribution rate for a 100% benefit accrual should be made available for all staff members for a limited time in their career history to prevent groups, such as those with caring responsibilities, facing discrimination in pension entitlement. In a career average pension scheme, such as USS, any discrimination during a working lifetime is transferred into a discrimination in pension entitlement. USS should be looking toward progressivity not only in contribution rates but also pension outcomes if it is to protect intergenerational fairness.

Governance and Democracy

The report identifies a range of areas where the structure of the USS governance and the Scheme Rules ‘do not foster a cooperative environment within which the Stakeholders [UUK and UCU ed. note] can work well together’ (JEP, 2019, p.4). While the JEP report damningly shares the view that the valuation governance is ‘not fit for purpose’ (p.38) this is in many ways the weakest area of the JEP report. JEP fails to accurately locate the governance crisis within USS and instead seeks to suggest failure is simply a general inability of the mechanism of governance to reach a consensus. The JEP’s starting point of avoiding being ‘critical of any of the organisations involved’ (p.6) means that it’s conclusions occasionally reduce to superficial platitudes rather than guides to long-term change. Still worse there is an encouragement to a reduction, rather than an increase, in democratic control over USS.

USS are reported in 2019 to have identified ‘members and their families’ as the key mission of the pension scheme and JEP strongly support a more ‘member-centric’ move. However, statements without actions of intent are simply examples of what might be termed ‘pensioner-washing’ by the pension scheme. The representative voice of current and future pensioner interest within the governance of the scheme comes from the involvement of UCU as a stakeholder organisation. Yet far from this voice being given greater influence USS has acted to weaken members’ voices. The development of the scheme into a Master Trust, an organisation governed by regulations for a Defined Contribution pension scheme rather than Defined Benefit as USS, is designed in part to minimise member involvement. Master Trust regulations allow UCU to recommend, but not appoint, a Trustee. Similarly, the dismissal of the UCU appointed Trustee Prof. Jane Hutton is not commented upon in the JEP report. Jane provided the only critical testing of the USS executive and was a genuine independent voice on the Trustee Board. Her removal was a direct consequence of her independence and willingness to challenge the USS management executive.

JEP’s primary solution of a set of ‘Shared Valuation Principles’ is insufficient if the USS Trustee Board and its management executive, UUK or tPR intent continues to be to place pensioners interests last. Indeed, the setting out of the Shared Valuation Principles, (fig 7, p.36) itself doesn’t mention pensioner interests only scheme sustainability. Closing the scheme leads to a sustainable outcome not in pensioners’ interests, but this is not ruled out of these proposals.

A final concern is the implication that a consensus failed to emerge simply due to the composition of the JNC. A proposal for a sub-set ‘senior’ stakeholder representatives (pp.50-51) to meet separately would seek to remove those elected UCU members who have fought hardest to retain the union’s policy of no-detriment. Increasing democratic oversight of USS would be a worthy aim but it is only UCU which provides an open democratic mechanism for scheme member involvement in stakeholder policy making.


JEP emerged in 2018 as an independent attempt to resolve the most significant industrial dispute Higher Education has seen in the UK. The attempt to find a technical solution to a valuation in its First JEP Report failed, not due to the inability to introduce JEP’s proposed changes to a valuation but rather a deliberate unwillingness of USS, UUK and tPR to agree to this settlement. As a result a second wave of strike action began in November 2019. The difference this time is that UCU members no longer have trust in a negotiated settlement which fails to recognise the aim of their adversaries in the dispute; namely the theft of their pensions and the undermining of any right to retirement staff may have.

Trust is at an all-time low in the sector as the debt driven neo-liberal marketisation of the sector deepens. The Second JEP Report again provides ample examples of the failures of the USS management of the Scheme and the employers’ intent on breaking apart the arguably most successful collective private sector pension scheme to have emerged post-war. However, it has not recognised the divisions between the differing parties involved for what they are; a struggle over the existence of a collective higher education system, fought out on campuses and picket lines, as well as on the terrain of pension assets and liabilities.

Carlo Morelli

UCU Scotland President, NEC and past UCU USS negotiator