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December, 2017:

Latest USS news – and hot off the press!

Dear all,
The USS Joint Negotiating Committee meeting is continuing today after a full day of discussions yesterday.  Please spare a moment to think of those who represent UCU and who are negotiating hard on your behalf.  News will come out as soon as there is any. AND HOT OFF THE PRESS: negotiations will continue now till 23 January – the team can claim some success!!!  This means that a decision will not be taken by UUK until after the result of the strike ballot – and it may well be our threat of sustained strike action which has made them pause for thought, so this makes it ESSENTIAL that we get as many votes as is possible on the ballot. HAVE YOU VOTED??
As we move towards the Christmas break, and desks are tidied, clutter is decluttered and there is room for sustained concentration, please make sure that you have a) received your ballot paper, b) filled it in and c) posted it.  If you have not received your ballot paper, please go to where you will need to quote your name, email address and branch, and will be able to give an address that will work for you over the University closure period. This form goes to UCU Head office who will then send a file of details to Electoral Reform Services who will send out the replacement ballot paper.  The link shows a photo of what the envelope will look like – please bear in mind that if you are asking to have the paper resent to an address outside the UK, there may be legal implications for receipt of union papers and we’d strongly advise checking the laws of the country you’ll be in.
There is plenty to read out there on the subject of the USS dispute.  Most of you will, I’m sure, have seen John Brady’s message to all staff on the university staff homepage (  UUK also issued a statement which is similar in tone.  We could happily spend time pulling John Brady’s statement apart, but Sheffield’s branch of UCU have done a far wittier takedown of the UUK statement, which can be found at Enjoy!
Other things to read: the employers have now prepared modelling of what pensions would look like following the proposed changes.  The link is here –  Page 3 is the good one, but do read through carefully.  You’ll see that in every single example, the projected annual pension income, for any group, issignificantly less than it would be on the current basis.  And remember that this is the document commissioned by UUK, in support of their argument.   Worse still for their argument, the base calculations that they’ve used are not the same ones as have been used by USS to model the pensions going forward for the benefit of the pensions regulator – they’re better figures.   In other words, UUK insisted on sticking to a valuation of the pension scheme which they’ve claimed makes it unworkable: but they have then used different figures to predict what your pension would be if they managed to force through their changes – and the final outcome is still startlingly bad….  Mike Otsuka of LSE has put up a new blog post which analyses the analysis – and his conclusion is that if the (better) figures used by Aon in the analysis above were to be applied to the overarching fund, then we would all be very happy.
The modelling that UCU had done is at–USS-no-DB-comparison-First-Actuarial-29-Nov-17/pdf/firstacturial_ussvtps_nodb_29nov17.pdf but the thrust of that was to compare USS pensions to the TPS pensions for the post-92 universities.
Sally Pellow
Reading UCU

Q&As re USS, answered by UCU National Pensions Official

  1. What effects would the proposed changes to the USS pension have for early career academics?

Early career staff will be the most affected by the changes as they have less built up in the current scheme. They are also more likely to be on less secure contracts. Whatever anyone has built up in the current scheme up to April 2019 will be protected however, going forward under the current UUK proposals they will have no further benefits built up in defined benefit (annual pension linked to salary and service) but will be built up in defined contribution (what you pay is defined but outcome dependent on stock market) which will be a cash sum from which you would have to drawdown until it ran out or buy an annuity (pension) which is very expensive.

2. How do the proposed changes compare to what is happening to pension systems in the private sector, where investment funds are a common pension vehicle even for third sector employers?

Very like private sector pensions in that the build up is in defined contribution but the death in service and ill health will continue to be defined benefit.

3. Do we know in what kinds of investments our pensions will be held in, if the changes go ahead, and do employees have any control over these investments?

Thousands of members already build up a defined contribution pot in USS either as an extra and by taking the ‘match’ as a way of getting an extra one percent from employers or if they earn over £55,500 and all salary over that is pensioned as defined contribution. Currently there are 6 choices for members 2 lifestyles (one ethical) and one other ethical but this would expand.

4. I was wondering if it were possible for USS members to have their contributions paid into TPS. If not now, in the future?

This is an idea we would be happy to explore but it’s not under discussion at the moment.

5. Has the Union produced detailed data of the potential impact on members at different stages of their career i.e. 25, 35, mid-career and say two to three years before intended retiring date?

The First Actuarial report shows the impact on 12 hypothetical members at different career stages:–USS-no-DB-comparison-First-Actuarial-29-Nov-17/pdf/firstacturial_ussvtps_nodb_29nov17.pdf?utm_source=lyr-ucu-members&utm_medium=email&utm_campaign=members&utm_term=uss-all&utm_content=Your+pension+under+attack


Short version:


  1. What alternatives are UCU proposing?

Under discussion but will be governed by conference policy


  1. In the event that we do go over to a defined contribution pension, why should the university contribution be 18% to our 9%? (8%, it is only 9% with the match which will go)

That amount was based on what was needed to support our defined benefit pensions under the USS. (The employers envelope is 18% (until 2020) out of that is deficit recovery, charges, admin, money to keep the defined benefit paying out assuming the employee contributions are not going in; anything left will go into the individual DC pot and all the employee 8% will go into their individual DC pot. The individual will probably get an option to pay less in, which may be attractive to those who feel 8% is too high.

In 2011 the employers only wanted to pay 10% into a DC pot, the current offer is slightly more but the closed defined benefit section will eat money.)

Now that the money would no longer go to that, the amount they provide needs to be enough for us to have a sensible pension given expected returns. If this is above 27%, then they need to contribute more. Can such a calculation be done to determine what they would need to provide to be used in negotiations?

They don’t think they need to give you enough for a sensible pension they say they won’t contribute more, not can’t, won’t.


  1. In the event that we do go over to a defined contribution pension, can we get a non-negotiable guarantee that the universities will indefinitely contribute 18% (or whatever the final amount is) of our salaries into a defined contribution pension? I am concerned since currently the universities pay 18% to our 9% since that it what the USS needed to pay our pension. If the universities are no longer liable to support our pension, what is stopping them from slowly reducing their contribution to our pension?

They only ever promised 18% to 2020 and signaling they will reduce but as the Defined Benefit has no member contributions going in it will be very expensive.


  1. In the event that we do go over to a defined contribution pension, what fraction of the contribution will go towards supporting the defined benefit pensions? If this is any number above 0, why should we be responsible for supporting other people’s benefits? (Anyone in now will have benefits building up until 2019 not just other peoples.)

How can we be guaranteed that none of our money is used to support a defined benefit pension? Your money will go into your pot you can see it on the Investment Builder login.  Yes the employer will have to pay a lot to keep the DB section, they have a legal duty to pay out pensions already built up.


  1. In the event that we do go over to a defined contribution pension, why should USS be the one to manage it? For whatever reasons, they have shown that they are unable to manage our pensions effectively. I don’t see why we can’t get another company to do it.

Good point one that has been made. However, because it’s so big it can buy investments cheaply and the employer will pay member charges for most options and admin. It is up to the employer not a member what scheme is on offer in a workplace. An employer will only pay in to the one scheme per group of employees so it’s that scheme or no scheme.


  1. In the event that we do go over to a defined contribution pension, what happens to our matching 1%? Will this carry on or be removed?

Whatever happens the match will be removed probably around April 2019. Make the most of it.


  1. What kind of pensions are the leaders of the UUK on?

UUK and USS staff like UCU staff are all in USS. The Vice Chancellors and such are usually earning too much to pay into a pension there is only so much you can pay in for a lifetime if not they are in USS.


  1. What happens if all junior members of the USS simply pull out?

They would love it. It would save employer contributions and not have to provide an alternative, if it is DC it can run as well with 3 people its all about individual pots.


  1. If the future accrual of the defined benefit portion of our pensions is set to zero, what does it mean to keep the death and incapability benefit? Do our partners or dependents somehow get our defined benefit pension if we die young? If so, how is that pension calculated?

In the current UUK proposals Death in Service and Incapacity will remain defined benefit in most DC schemes there would be a lump sum. How this would be calculated is yet to be discussed.


  1. In the news, I keep hearing that the issue with the USS all comes down to how future risk is assessed and that since universities are long standing institutions, there is no problem in the long run (e.g. Are the universities being unreasonable about this and if so, how can this be remedied? Can we use a 3rd party to give a fair assessment of the risk to be used in negotiations?

We have tried and taken our Actuaries, First Actuarial into meetings. No success.


  1. How do the changes affect those who are already drawing a pension?

No change


  1. How do the changes affect those who are on a flexible contract and drawing a fraction of their pension from USS?

No change on pension and same impact on pension building up as other members.


  1. Re the new pensions scheme, does this work like the Premium Bond system where one gets the capital (i.e. amount invested back) and then any gains on top on date of retirement or is the whole amount at risk and what you get back depends on how the market is doing on the day one retires?

The whole amount is at risk.


USS Pension Talk 12.12.17 13:00 Edith Morley G25. All staff welcome.