New USS Brief — reasons to vote YES

Please see below for a clear explanation as to why it is essential to return your ballot paper with full YES votes in defence of your pension. (Sam Marsh is a UCU negotiator on the JNC.)

Why it is essential we vote YES

The promise to implement the Joint Expert Panel’s decisions as the basis for ending industrial action has been betrayed by your employers as they circle wagons to protect the USS patriarchy. Only a renewed threat of action will save your pension.

If you are expecting a ballot paper and have not received one then please let the UCU office know.

USS Jargon Buster

If you are baffled and exasperated by the terminology or need a concise key to the dispute about your pension, read on.

Contribution rate: The proportion of your salary that goes into the pension scheme, coming from the employer and from you.

Deficit: Despite headline-grabbing ‘deficits’ in 2011, 2014, and 2017, USS is growing, making an annual surplus and currently has massive assets, £72bn of late August. The deficit is a hypothetical calculation based on assumptions that the USS executive has manipulated to its own ends. If the Joint Expert Panel recommendations were applied to the March 2018 valuation, the deficit would vanish.

Defined Benefit or DB: how most pensions used to be. You and your employer pay in during your working life, you know what proportion of your salary you will receive on retirement. These are mutual or collective schemes. There are currently still 10 million people in a DB scheme. The pensions industry and its regulator want to shift risk and costs of pensions onto individuals so they are keen to move people onto Defined Contribution schemes. Final Salary Defined Benefit schemes calculate your pension on your salary at retirement. Career Average Defined Benefit Scheme averages your salary over time to determine your pension.

Defined contribution or DC: how pensions increasingly are. You know how much you pay, you have no idea what your pension will be. You accumulate an individual pension pot of shares, which you receive on retirement. At retirement, you would have to buy an annuity, which would provide you with a regular income (so it is in the interest of the pensions industry to get people onto defined contribution pensions).

‘De-risking’: USS, the Department of Work and Pension and the Pensions Regulator are ideologically committed to ‘de-risking’: moving high yielding equities into government bonds or ‘gilts’, thus weakening performance of the scheme and in-creasing deficit, creating more pressure to move to a DC scheme or increase contributions.

Employer Covenant: The: a credit rating based on a subjective assessment of the employers’ commitment to the pension scheme. Because the USS is backed by multiple employers on a last-person-standing principle it has a uniquely strong employer covenant. The ‘deficit’ jumped from September to November 2017 after a consultation in which employers were asked what their ‘appetite for risk’ was by USS to which they replied that they did not like risk. Consequently, the pension’s regulator deemed the covenant to be ‘tending to strong’ rather than ‘strong’ pushing the ‘deficit’ up.

Joint Expert Panel: this body was established through agreement between the UCU and UUK during the pensions dispute of 2017-8, in order to look at the calculation of the ‘deficit’ (the 2017 valuation of the scheme) and the governance of the USS. It reported on the former in Sep 2018 and it is soon to report on USS governance. The USS executive has effectively ignored the findings of the first report.

Joint Negotiating Committee: The: the negotiating body between the UUK and UCU regarding the USS.

Option 3: Rather than challenging USS to implement the Joint Expert Panel’s recommendations, which, if applied to the March 2018 valuation, would have led to no increase in contributions, the employers opted for a stepped increase in contributions, starting at 9.6% of salary for employees and increasing to over 11% in 2021.

Pensions Regulator: the ‘independent’ watchdog for the pensions industry. But this is a government appointee fully committed to the liberalisation of pensions and has done next to nothing to protect those who have suffered from pensions injustice such as those at Carillion, BHS, British Steel and the Miners Pension Scheme. Bill Galvin, now CEO of USS, was formerly the Pensions Regulator.

Technical Provisions: The technical provisions liabilities must be calculated every valuation (every 3 years) and is a measure of the assets the scheme requires to pay off all its liabilities (i.e. members’ pensions). The estimate depends on life expectancy, inflation, and the ‘discount rate‘. The latter is a major source of contention, with the USS Executive having misrepresented the regulator about this rate.

Test 1: This calculates the assets the scheme will need in 20 years’ time if it is to be closed. The Joint Expert Panel, among others, have debunked Test 1. The Joint Expert Panel report noted that Test 1 drove investment strategy to-wards a low return on investment, higher deficits and greater contributions. Despite being discredited in the Joint Expert Panel, USS used Test 1 in its latest valuation.

USS Executive: The scheme managers who should administer the USS increasingly act in an entirely unaccountable manner. These are finance industry insiders. Bill Galvin, the CEO of USS, is the head of the executive board.

USS Board of Trustees: Because the USS is a mutual scheme set up through agreement between the employers and the union, the board allows for representation for both parties and independent experts. Jane Hutton was recently suspended from the USS Trustees after exposing the fact that the USS Executive had been systematically misrepresenting the position of the regulator on discount rates.

UUK: the university employers’ organisation.

Valuation, 2011: Supposedly designed to protect pensioners from the Robert Maxwell scenario, the pensions’ legislation imposed triennial valuations and has led to one defined benefit scheme closing after another. In 2011, the ‘deficit’ was £2.1bn. Our retirement age raised to 65 and was pegged to the state retirement age. Employee contributions increased from 6.35% to 7.5%. It introduced career average scheme for new entrants.

Valuation, 2014: £5.3bn deficit. From 2016, employee contributions increased to 8% and there was a £55,000 bar upon the final salary scheme, with contributions above this figure going into the Defined Contribution Scheme.

Valuation, 2017: a deficit of £7.5bn. The employers pro-posed a defined contribution scheme.
Valuation, 2020: the scheme is due another valuation ac-cording to the triennial approach

UK universities brace for strike action in pensions dispute

British universities are heading towards strike action later this year, after employers insisted on requiring staff to pay higher pension contributions despite union warnings that the move would trigger a ballot on industrial action.

The University and College Union (UCU) said it had rejected an offer by the employers, represented by Universities UK (UUK), to swap limited increases in staff pension contributions for a two-year bar on strike action.

The UCU will go ahead with balloting its members, including researchers, librarians and other academic staff, from 9 September, which means as many as 69 universities with members in the pension scheme could see strike action in the new academic year.

Jo Grady, the UCU’s general secretary, said university management were expecting their staff to meet more of the cost of pensions because the sector had been unable to control its own spending or curb a building bonanza.

“Step back and look at the wider context of this. Since the financial crisis, the proportion of overall spending on staff in the sector has dropped from 58% to about 54%, and we are seeing a lots of cuts to staff and benefits,” said Grady.

“But the sorts of expenditure we’ve seen at the same time have been capital expenditure, expensive new buildings and foreign campuses, which don’t directly benefit education, research or teaching. In that context, what we are asking for is not unreasonable.”

Grady said her members wanted a permanent solution to the long-running dispute over the structure and financing of the universities superannuation scheme (USS), including an overhaul of the scheme’s management.

“What we are saying is that enough is enough. We tried an interim solution last year and that didn’t work. If we have a vote for strikes this year the aim will be to fix the long-term issues, and not just another temporary fix,” said Grady.

If a strike goes ahead it will be the second over pensions in two years. Last year’s dispute followed an attempt by employers to transform the USS from a defined benefits scheme – which fixed pensions to salaries – to a defined contribution scheme with considerably lower pension payouts for most members.

More than 40,000 staff took industrial action during the strikes in February and March last year. Further strikes scheduled for April would have imperilled end of year exams and graduations, but employers backed down and proposed a joint panel of experts to look at the USS’s structure and valuation.

But according to Grady, little has changed, with USS managers unmoved and regulatory mechanisms meaning that contributions will have to rise in the absence of further agreement.

“We don’t need to be paying this at all. If UUK worked harder to implement the joint expert panel that they signed up to then we wouldn’t be here,” said Grady.

“It’s also a nice fudge that universities don’t have to discuss the massive overspending on vice-chancellors’ salaries that we have seen in the last decade, which is just the tip of the iceberg if you want to talk about misspending in universities over the last decade.”

UCU’s demands are multi-layered, and include a “no detriment” requirement that means that under any changes to the pension scheme its members will not increase their contributions above 8% of salary, as well as reforming the USS’s operation ahead of a new valuation for the scheme required in 2020.

The employers said they made a counter-offer, limiting staff contributions to 9.1% in exchange for the UCU agreeing not to strike for two years. “It appears that UCU’s ‘no detriment’ position means no compromise,” UUK said in a statement, after the union refused to accept the offer.

Adam Tickell, the vice-chancellor of Sussex and chair of the employers’ pensions forum, argues that requiring universities to pay substantially increased contributions would have damaging consequences for the sector.

“Importantly, increased contributions of this scale are simply unaffordable for many institutions, and the inevitable result would be redundancies, increased workloads, and reduced investment in our facilities,” Tickell recently warned.

Grady said the union would not give up its right to take action ahead of the crucial 2020 valuation, which could cause a repeat of last year’s strike if not resolved.

“This was a bully clause, plain and simple. Employers wanted to silence dissent from staff for more than two years. Their thinking is clear: they know contributions are scheduled to go up even more at the 2020 valuation and they will try to cut benefits as a result. They don’t want staff to be able to protest that,” Grady said.

USS member satisfaction plummets

With more strike action potentially looming in the autumn, it has been reported today that member satisfaction with USS has plummeted.

The annual report from the Universities Superannuation Scheme (USS) says that less than a third (31%) of members reported a positive relationship, compared to 38% in 2017/18 and 53% in 2016/17. USS dropped its target of members reporting a positive relationship with the scheme from 70% last year to 50% this year, but was still some way short of achieving its goal.

Unlike previous years, this year’s report does not include figures on member satisfaction. Last year less than half (48%) of members said they were satisfied with the scheme, a considerable drop from around two-thirds (66%) in 2016/17.

UCU general secretary-elect Jo Grady said: ‘It has been clear for some time that USS has lost members’ trust and that it has taken the annual report to alert those leading the scheme to this fact suggests they are worryingly out of touch.

‘Considering the complaints around governance this year, we are extremely concerned that USS appears to be cherry-picking what statistics to include in the report. Why are the member satisfaction figures missing?’

Read the full story and UCU reaction here.

Jo Grady: the miner’s daughter preparing for university picket lines

Jo Grady could hardly be better qualified for her new role. She was born in 1984 into a striking miner’s family; she studied industrial relations at university, and she is a leading expert in trade unions and pension disputes.

This week she will become the new general secretary of the University and College Union (UCU), whose members last year went out on strike over sweeping pension changes, causing two weeks of disruption on campuses across the country. Grady was on the picket lines, with her Glastonbury wellies and her homemade flapjacks.

This year, as she takes over the leadership of the UCU, which represents university librarians, technicians and administrators as well as academic staff, fresh strike ballots are being prepared for September over pensions – again – as well as pay. With the threat of further industrial action looming, Grady says: “It’s a huge responsibility. I take that very seriously. But this has to be resolved.”

The original strike centred on proposals to overhaul radically the Universities Superannuation Scheme (USS) – the country’s largest private sector pension scheme with 400,000 members at 67 universities and colleges. The changes would have ended guaranteed pension benefits for university staff, who would have lost up to £10,000 a year in retirement.

In an impressive show of solidarity and resourcefulness, UCU members did their homework, held their nerve, and saw off the immediate threat. It was a huge victory in which Grady played a key role as co-founder of USS Briefs – a research project that brought members up to speed on the detail behind the dispute. She was later elected to the union’s national dispute committee and then its national executive committee.

Since then key recommendations designed to resolve the dispute and preserve defined pension benefits in the long term have not been fully implemented, says Grady. “All of the sacrifices and compromises staff made have yet to be rewarded with the implementation of the proposals,” she says.

“It’s a defining issue. If we don’t stand up for this, what we are allowing is the managed decline of our pension scheme. Professions are defined by their terms and conditions and benefits, and secure retirement and pension income is one of those things.”

Grady, from Wakefield in West Yorkshire, was the first in her family to go to university. Her father was a striking miner who worked at the Lofthouse colliery, among others; her mother raised her and her two brothers against the backdrop of one of the most bitter and protracted industrial disputes in living memory.

The experience shaped her. She grew up on stories about the kindness of her community, dining on tinned peaches from unlabelled cans donated by a family friend who worked at the local canning factory, and the importance of pulling together and looking after each other.

“I grew up in a politicised household,” she says. “My dad is a central figure for me in how I think about things. I grew up with a sense of fairness, and of what injustice looks like, and also healthy cynicism about critically analysing the way information is delivered to you. That sense of ‘when we stand together and we act collectively we are stronger’ has always informed my thinking. When you grow up in a working-class community, you really feel that.”

Striking university staff last year
 Striking university staff last year – but the dispute was not fully resolved. Photograph: Wiktor Szymanowicz/Barcroft Images

After the miners’ strike finally ended, her father left the colliery and her parents opened a pub – “the community living room” – where Grady worked on Saturdays and Christmas Day, sending lonely older neighbours home with Christmas leftovers. After school and A-levels at Wakefield College, she studied industrial relations at Lancaster University, where she went on to do a master’s on the causes, consequences and solutions of the pensions crisis. Her PhD was about pension disputes, trade unions and the pension crisis.

She landed a job as a lecturer at Leicester University in 2009, moving to Sheffield where she became a senior lecturer in employment relations in 2017. “I’ve spent the past 14 to 15 years researching trade unions, industrial relations and pensions. I’m not sure there’s anybody more specialised in that area in the UK than me.”

Grady admits it was a huge emotional burden having to tell her students last year about the teaching they would miss because of their lecturers’ industrial action. “To know you are essentially abandoning these people who you care very much for and who rely on you, yes, that was difficult.”

Overwhelmingly, however, she says students gave lecturers their backing – with many of them joining the picket lines and sharing the banter, sense of solidarity and the cakes – and going on to organise student occupations in support.

For staff, there was a new camaraderie and shared sense of pride. “We were not all alone in our offices, we were together every day. It was a real democratising moment where all the hierarchies that existed in your day-to-day working environment just disappeared.”

The pickets braved “the beast from the east”. Only the geographers, says Grady, were appropriately dressed. “I don’t think the employers could have predicted that by allowing the dispute to go on for as long as it did that they were creating that alternative space for those solidarities to flourish.”

As the grassroots candidate to succeed the outgoing UCU general secretary, Sally Hunt, forced to retire in February because of ill-health, Grady won with a significant mandate, picking up 64% of the vote in the second round, with a record turnout. Come September she will be touring branches up and down the country, doing everything possible to get people to vote for strike action.

This time there will be simultaneous strike ballots, one to defend pensions, and a second to secure a fair deal on pay, workload, equality, and job security. Ballots open on 9 September and will run until the end of October.

On the pensions ballot, Grady warns: “We are heading towards another round of industrial action, because employers are refusing to cover the cost of the extra contributions USS has demanded.” And on the second ballot: “Pay has been held down for too long. It is time for a comprehensive deal for university staff on pay, equality, workload and job security that puts staff first.”

The UCU’s higher education committee will meet in November to discuss the results of the ballot and what comes next. Grady is optimistic. “One of the refreshing things that you see in the sector is an appetite for people to stand up for themselves.” If strike action follows, there will almost certainly be cake.


Defending our profession

22 July 2019

UCU’s general secretary-elect, Jo Grady, has updated members in higher education on the position of the employers on USS and the annual negotiations.

As we head towards nationwide strike ballots on USS and on pay-related issues in September, I want to update you on our progress.

UCU’s officials and elected negotiators are working hard to get a better deal for you. We don’t ask you to vote for strike action until we have made every effort to negotiate, consulted our professional advisers, and concluded that industrial action is the only way to achieve our goals.

In both disputes, employers have refused even to meet us halfway. But that is not a reason to despair. We have to remember how quickly employers came back to the negotiating table when last year’s USS dispute started. Next time, we will be even better prepared. We have new teams of elected negotiators, and we will be able to secure a good deal when we act collectively. We also have to remember that our students supported us last time, because they understood that staff, not vice-chancellors, make universities what they are. UCU and the NUS are continuing to work closely together to stand up for staff and students and I am sure that we will receive strong support once again.

By standing up for pensions, pay, equality and job security, we are defending not just ourselves but our profession. The sector’s income has increased by a third since the beginning of the financial crisis, and that is thanks to our hard work in an incredibly difficult environment. How have employers rewarded us? With intensifying casualisation, wage suppression, and pension cuts. Some of us may not feel the effects of cuts and inequalities directly, but we can all appreciate what they do to our colleagues. Securing national agreements on these things is the most efficient way to make the sector fairer, more inclusive, and more appealing to future generations of university staff.


It’s clear from my meetings with employers that we face a similar situation to the previous USS dispute, with employers refusing to listen to our main concerns. Employers failed to get USS to implement the most important recommendations of the Joint Expert Panel (JEP). Now they are forcing some of the costs of USS’s unwarranted contribution increases on to us, despite all the sacrifices we have already made: from the massive cuts in 2011 and 2014 to the deducted pay which employers pocketed after last year’s strike. In order to get employers to cover these costs, we may have to count on winning the casting vote of the independent chair of the USS Joint Negotiating Committee, Sir Andrew Cubie. UCU’s negotiators will make the best case they can, and I will report in more detail when we have an outcome.

Members have asked me whether there might be a legal solution. UCU has been investigating this option from various angles since I was elected. We have met and commissioned advice from several experts on USS and our employers’ actions, and I will soon be able to tell you more about the progress we have made. However, none of these solutions will come soon enough to avert the contribution increases which we are facing.

These increases have consequences. Members are already leaving the scheme because of the increases we have started paying as a result of the 2017 valuation. Further increases will likely lead to more departures, jeopardising individual members’ retirement savings and destabilising the scheme. Preventing that is one of UCU’s top priorities.

Pay, equality, job security, and workload

UCU’s elected negotiators and officials recently attended another meeting with employers on the 2019 pay claim. Again, we are in a position where employers simply refuse to make us a meaningful offer unless they are faced with a credible threat of strike action.

Our demands are modest. As far as pay is concerned, even if employers granted us the 3% (plus RPI) increase we are asking for, it would not bring our pay back in line with the level it was at ten years ago, after years of real-terms cuts. Given our willingness to compromise, we are deeply disappointed by their offer of only 1.8% on pay; no action on inequality or casualisation; and nothing whatsoever on workload.

Preparing for the ballots

I hope you will bear this in mind when you receive your ballot papers in September. Look out for further details of the tour of branches which I’ll be undertaking during the ballot period, and don’t forget to ensure that your branch can keep you informed by updating your membership information – especially your current institution, email address, and postal address. And please continue to get in touch with me via email.

Jo Grady
UCU general secretary elect