First, as USS makes clear, by calling for the addition of a layer of prudence to an already conservative valuation, our employers (UUK) are responsible for driving up USS’s declared deficit from £5.1 bn to £7.5 bn. UUK have thereby gratuitously increased the payments that will be required to cover past pension promises, leaving less money for our pensions going forward. This is an own goal which is good for neither employers nor scheme members.
But these remarks are addressed, not to our employers, but to the people who are calling the shots for our union:
A YES vote will be interpreted as a mandate for sustained and disruptive strikes, since Sally Hunt writes: “There is no point pretending that anything other than sustained strike action with the aim of hugely disrupting (and not rescheduling) lectures and classes in the New Year will make the employers listen.”
There is, however, also no point in getting our employers to listen to demands for things they are incapable of delivering. Our employers cannot deliver something the Pensions Regulator won’t accept. The Pensions Regulator has stated in a letter to USS that the level of investment risk of the valuation that USS proposed in September is at the limit of what they would find acceptable. In the absence of a significant and undesirable increase in employee contributions, the current level of defined benefit on salaries up to £55,550 exceeds this level of acceptable investment risk for future accruals.
In order to achieve the required majority vote of a majority turnout, UCU will need to make a proposal for us to rally around, which is realistic about what can actually be achieved by the strikes we’re being asked to authorise. It will also need to be worth the disruption and sacrifice.
The following is both achievable and attractive: a WinRS (wage in retirement scheme — see linked slides 10–12 including notes, this post, and this slide presentation by First Actuarial’s Hilary Salt) funded in perpetuity by assets along the lines of USS’s current growth portfolio, but with a very modest core DB promise that remains within USS’s and tPR’s level of investment risk, with all further pensions increases contingent on investment returns. If investment returns exceed a modest CPI + 1.85%, it will be possible to provide us with pensions beyond the level of our current CRB 1/75 accrual.
WinRS is something our employers can deliver, which they also have an interest in adopting. But if they refuse in the first instance, it’s something worth going on sustained strike to achieve.
So I hope UCU proposes WinRS, or something else that is both attainable and attractive, rather than something our employers can’t deliver, such as a preservation of the DB status quo.