An Achilles Heel of the “Reverse USS!” FAQs
The “Reverse USS!” website containing the UCU Left-supported proposal to restore all pensions benefits by 1 April 2023 has just posted a 5,000 word set of FAQs which attempts to address the various problems with their proposal that have been raised, including those I spell out in my blog post “How the USS cuts cannot be reversed: A critique of the UCU Left negotiators’ proposal to restore benefits by 1 April 2023”.
These FAQs are a muddled mess, shot through with false or misleading claims. To offer one fairly egregious example, they assert the blatantly false claim that “Reduced benefits cannot be imposed on members intra-valuation.” I will not address all of its errors in this initial post in reply. Rather, here I will simply point out the most obvious respect in which these FAQs fail to show how it would be possible to implement their proposed restoration of benefits on such a tight timetable.
An Achilles heel of the FAQs is displayed in the following Q&A:
USS may put up obstructions which prevent quick changes. How do we force the Board to comply?
These changes are agreed by the JNC not the Board. USS is also very concerned about its public image and member confidence. This is why we need a broad public campaign, including USS members who may not be members of UCU. USS will be worried about bad publicity if it causes delays or puts up unnecessary obstacles.
This is conspicuous in its failure to acknowledge that the USS Trustee Board must agree to the costings or funding of any proposal to restore benefits. At present, the costings in force are the exorbitant costings of the 31 March 2020 valuation. For the restoration of benefits to be possible without a huge hike in contributions, the Board would need to agree to revise their costings. This fact is ignored in the following sentence in the FAQs:
Thirdly, benefits and contributions rates are decided by the Joint Negotiating Committee (JNC), not the Board or The Pensions Regulator.
Although it is true that JNC determines the rate of contributions that employers and members will pay, it lacks any authority to determine what level of pension benefit will be provided at that level of contributions. Rather, such costings of benefits must be approved by the Board.
The FAQs state that:
Our augmentation is proposed on the basis of what USS terms the ‘post-valuation experience.’ This is based on the entire period from the valuation to the current point in time, not simply a single monitoring dataset. The changes would be enacted at the end of the valuation period, i.e., by the time they are implemented in April 2023, we can rely on monitoring data from the bulk of the period for which the 2020 valuation applies.
It is not, however, within the power of JNC to update costings on the basis of such post-valuation experience. Rather, this power rests with USS’s Board. Moreover, USS has made clear on numerous occasions during the past few months (see, e.g, here, here, and here) that they will not agree to revise their costings on the basis of 2020 post-valuation experience. In so doing, they have made reference to broader trends and not merely single points in time. Rather, USS has made clear that revised costings will need to await the more thorough and comprehensive analysis of the 31 March 2023 valuation.
How do the FAQs propose to overcome USS’s much-repeated opposition to revising costings on the basis of post-2020-valuation experience? Here, all they say is the following, which is contained in the FAQ from which I quoted above:
USS is also very concerned about its public image and member confidence. This is why we need a broad public campaign, including USS members who may not be members of UCU. USS will be worried about bad publicity if it causes delays or puts up unnecessary obstacles.
USS is now undertaking a “deep dive analysis” of the 31 December 2022 monitoring updating of the 2020 valuation. The outcome of this analysis will not be available before the beginning of February. By that point, it would be a mathematical impossibility to complete all of the following that would be necessary fully to implement their proposal by the 1st of April: authorise, prepare, notify employers of, launch, complete, analyse, and implement the outcome of a 60-day member consultation on the increase in the DB/DC salary threshold.
Is the proposal therefore that a “broad public campaign” be launched which manages to convince USS, not only to drop their commitment to waiting for the outcome of the 2023 valuation and instead decide to issue new costings on the basis of post-2020-valuation experience, but also to base these costings on this experience even before they have completed their analysis of the most recent monitoring data?
One needs to descend into the realm of pure fantasy to think a “broad public campaign” among USS members could be launched in time to accomplish this. Public campaigns have been launched to correspond to various USS consultations in the past. They had broader support among the membership, and more time to build, than this proposal that is conspicuously lacking in the support of the well-informed majority of UCU negotiators over USS. These campaigns went nowhere. USS was unmoved. This in spite of the fact that they were far more well grounded in evidence and sound arguments than these FAQs. It is therefore naive to think a campaign to convice USS to restore all benefits within the next three months on the basis of post-2020-valuation experience, which would need to come to fruition by the middle of January*, would fare any better.
The FAQs begin by correctly noting that it might not be possible to restore benefits by means of a 2023 valuation. But they go off the rails in proposing that we should therefore try to restore benefits by the different means of an updating of the 2020 valuation which is definitely bound to fail.
[*See this further post for more on the absurdity of the proposal’s timetable for restoration: “The absurd timetable of the Reverse USS! proposal: The 11-day question which supporters of the proposal cannot and will not answer”.]