Important background to UCU ballot on dispute regarding USS
Members of the University and College Union (UCU) are being balloted between 1 October and 20 October on industrial action over reforms being considered to address the significant deficit in the scheme.
The Employers Pensions Forum for Higher Education has said that “UCU’s ballot material includes misinformation over employers’ proposals for reform that are not yet finalised”. The information below, provided by the Universities and College Employers Association, sets out the background to this statement and the current position with discussions about the future of the Universities Superannuation Scheme (USS).
- The USS has a sizeable and persistent yet volatile deficit. In March 2013, this deficit (the difference between the scheme’s assets and the value of the benefits for which it is liable) was £11.5 billion. In March 2014 the deficit is expected to be around £8billion. Reform of USS members’ future benefit structure is necessary to address the deficit and ensure that the USS remains viable.
- The employers are working with the UCU and the USS Trustees to consider what approach is needed to address the deficit, including considering the necessary changes to the scheme’s future benefit structure. The employers’ objective is for the USS to remain affordable, attractive and sustainable for both employees and employers, while addressing the deficit and reducing the risk of future contribution increases.
- The UCU modelling that is provided as supporting evidence for the ballot for industrial action is premature and ill-informed. By disregarding the modelling being considered jointly by UCU and UUK, UCU has provided misinformation to its members even though the employers’ proposals for reform have not yet been finalised and are the subject of continuing discussion between UUK and UCU.
- UUK has just concluded consultations with USS employers on the possible options to address the deficit. The employers’ position will then be developed further in the coming weeks and USS will provide high quality modelling to enable understanding of any impact on future benefit accrual.
- The benefits a member has built up before the date that any changes are implemented will be protected and will be calculated based on their service and pensionable salary at the date of change.
- Institutions will receive a report on the outcome of the employer consultation following the EPF USS Group meeting and the employers’ proposals for reform will be publicly circulated once they are finalised later this autumn. UUK will also share modelling on the implications of the proposed reform for different categories of USS members in terms of their future benefit structure.
- The employers’ proposals will be shared with UCU through the USS Joint Negotiating Committee (JNC) in October. The JNC consists of an equal number of employer and UCU representatives and an independent chair. We also expect the UCU to put forward their proposals for reform to the JNC.
- Following the negotiations during the autumn and a decision by the JNC, a formal consultation with all affected employees and representative bodies on any proposed reforms to USS will take place in early 2015. Employees’ views must be taken into account by the JNC and USS Trustees before a decision to implement any changes is made.
Timeline of key forthcoming dates
Employers’ representatives in the Employers Pensions Forum (EPF) USS Group meet to discuss the responses received from scheme employers following the recent UUK employer consultation, and decide on the proposals for future scheme design and contributions which will then be taken forward to negotiation with UCU.
USS JNC meeting where member representatives (UCU) will meet employer representatives (UUK) to consider initial proposals from the employers – and if UCU wishes, from UCU – for future benefit reform.
Further USS JNC meeting aiming to conclude discussions between the parties on potential benefit reforms and decide on the proposed changes that will be the subject of the statutory consultation by employers with affected employees.
The USS Trustee Board considers the JNC decision and asks scheme employers to commence the statutory employee consultation with affected employees on proposed USS benefit reforms which will last for at least 60 days. All active members of USS as well as employees who have opted out of USS or other USS eligible non-members should by law be included in the consultation as well as certain representative bodies. This consultation must be undertaken by each scheme employer with their own employees. The JNC and USS Trustees will then receive feedback from the consultation before making final decisions by June 2015.