If you’re a university employer participating in the Universities Superannuation Scheme (the ‘USS’), the UCU’s latest threats of strike action this Michaelmas term won’t have escaped your attention.
What has happened so far?
For those who were perhaps enjoying the opportunity for some last minute R&R by the Med, and who haven’t managed to keep on top of the news, the UCU’s warning of “inevitable strikes” came following a vote by the USS Trustee and UUK (the body appointed to represent universities in the USS) to pursue an alternative approach to the 2020 USS financial valuation.
The 2020 valuation shows a significant increase in the gap between the USS’s assets and liabilities, and a real and immediate need for improved funding. In short summary, the revised approach looks to deal with these core issues by, amongst other things:
- marginally increasing university employer contributions to 21.4% and employee contributions to 9.8% of salary;
- reducing the rate of accrual from 1/75 to 1/85 of salary per annum;
- reducing the salary threshold for accrual to £40,000; and
- further limiting the inflation protection afforded to benefits in payment.
The UCU considers that this agreed proposal is unnecessarily detrimental to USS members, and that it can offer an alternative approach which limits the amount by which future benefits must be reduced, while at the same time requiring USS members to contribute less to the scheme rather than more. The UCU has asked all parties to consider this proposal as a matter of urgency, threatening that it will otherwise call on its members to strike.
What will happen next?
Although approved by UUK and the USS Trustee, the proposal for dealing with the 2020 valuation still needs to undergo a 60 day period of consultation with affected members and their representatives. This is due to take place later this year. An additional consultation with universities is also needed to approve the formal funding documentation.
Changes to contribution rates are due to be introduced with effect from 1 October 2021, although changes to benefit accrual rates and future benefit structure won’t come into effect until April 2022.
What can you do?
Whatever your university’s views on the situation, you may be wondering what, if anything, you can or should be doing. Clearly no single university can determine what will happen next and how the USS trustee and/or the UCU will respond. That is not to say, however, that there isn’t a lot that can be done to support the university and staff in the next few months.