Skip to main content

Potential changes to the USS pension scheme and what we can do about them

The Aston UCU branch, along with other branches across the university sector, is being asked to vote on whether or not to take action in defence of our pensions. We have suffered a reduction in the real value of our salaries over the last few years and now we are being threatened with a reduction in our standard of living after we have retired.

The threat to our pensions is dire, and it is not just the UCU saying this. The Times Higher Education commissioned financial modelling by pension consultants Barnett Waddingham that showed "some academics would lose about 20,000 pounds a year in retirement income if the new scheme goes ahead."

The report is clear: nobody is safe. "Under the UUK proposals, benefits for past service for existing final salary members would be calculated based on their salary at the date of the USS changes and uprated only in line with the consumer price index of inflation." In other words, you might be on a final-salary scheme now but it will be frozen at the point when the changes are made, with the least favourable method of incrementing benefits from that point: in line with the cost of living rather than average earnings.

The analysis shows that everyone will take a big hit on their pensions. The reductions given in the examples range from 48% to 11%, with cuts even for those who have been hit hardest by the changes already imposed. Take a look at the article in the Times Higher Education and see how you compare with the profiles.

Research conducted for the UCU comes up with very similar conclusions. New joiners are already penalised by losing the final-salary scheme and will suffer again. But those currently on the final salary scheme could have their benefits slashed by 40% or more. The report is attached to this news item.

As always, the issue is about who will be made to feel the pain and these changes will hurt employees more than the employer. There are alternative, less punitive approaches to dealing with the deficit but if there is no will to oppose what the employers are doing, we will end up with the worst-case scenario. Aston management's email may say the UCU is "unhelpful" with its exposure of the proposed "hybrid" model's impact but it is the union's duty to explain the disastrous consequences of potential decisions, which become ever more likely in the face of a passive workforce.

We have already seen our salaries being held down and now our pensions are about to be hammered too. It is up to us to resist, and that means voting "yes" to the possibility of taking action. Of course, we hope it will not come to this but if we vote no, there is nothing to stop the employers doing whatever they like to our jobs, conditions, services, and even our standards of living when we no longer work for them.

AttachmentSize
firstactuarial_ussbenefitillustrations_sep14.pdf1.48 MB

Post new comment

The content of this field is kept private and will not be shown publicly.