NO DETRIMENT means No Detriment
Twelve months ago our historic strike saved the USS pension scheme in pre-92 universities from employers and pension scheme managers intent on destroying the retirement of UCU members. The union grew at a record rate and transformed our union. This success was underpinned by a widespread recognition that the problem with the USS pension scheme lay with the management of the notional valuation not the scheme itself. This culminated in a Joint Expert Panel (JEP) report that demolished the rationale underpinning the USS’s own approach to valuing the scheme. There is now a recognition running from the Financial Times journalist Jo Cumbo through to UCU Left that the USS pension scheme is not in deficit and is sustainable in the long term.
UCU’s position since the strike began has consistently been for No Detriment. This means no cuts in benefits nor increases in contributions.
However, rather than accepting this widespread consensus USS executive have sought to undermine the JEP and create instability in the scheme, ultimately as a basis for returning to their proposals for ending the Defined Benefit scheme.
As a result we are currently in the middle of a colossal sell-out over USS. The USS Board is attempting to push high contributions onto employers and employees, as announced in the USS letter to members of early March.
USS will blame delays in negotiations, but the root of the problem is the same as before: USS’s insistence on ‘de-risking’ the pension scheme and thereby deflating asset projections, and creating large future liabilities that the assets won’t cover. In other words this is an avoidable disaster.
But so far UCU is doing nothing to alert members to it. Instead UCU is silent on the increased contributions that started from April 2019 and hoping members will accept increased contribution rates.
As of 1st April 2019, all members of USS are now paying 10% more into the fund. From 1st October, USS is planning for all USS members to pay in another 20%. And from next April, a further 12.5%. All for the same pension benefits.
If we do nothing, we will be paying 42.5% more on 1st May 2020 as we did on March 2018. These figures might vary as a result of ‘negotiations’ over contingent contributions but unless we can create a political and industrial crisis by taking industrial action, the outcome will be broadly the same.
But this is just the start. The employers’ contributions will also go up substantially – far in excess of the contributions they have said they are willing to pay. If UCU sits back, we can expect the employers to quickly resume lobbying for Defined Contribution. 2019 will be like 2017 all over again. And our members will feel they went on strike for nothing. Worse, with the “option” of paying 42.5% more for Defined Benefit being equally unappetising, it will be much harder to stop DC.
The right of the union are hoping that the employers will somehow stop USS from imposing these cuts. They will talk up unity with UUK and hoping UUK may bring legal action against USS. But UUK’s action is only to save UUK members not us as members of the USS scheme. Quite the opposite UUK wish any increases arising from contingent contributions to be cost shared ensuring they offload 35% of any increased contributions onto us.
Let’s be clear increasing member contribution rates leaves our members unable to afford a defined benefit pension resulting in only a cheaper and inferior defined contribution pension being available. This is not wild speculation rather it is the advice of the industrial relations lawyers Pinsett Mason who have advised killing defined benefit by a thousand cuts if one big change cannot be achieved.
WHAT WE NEED TO DO
We need to trigger a dispute and start a campaign among branches to prepare them for a ballot. Our argument has to be that any increases represent taking USS into territory that could destroy it, and that when members voted to suspend the dispute for the JEP it was not on the basis of paying substantially more into USS – especially once the JEP has shown such contribution increases to be unnecessary.
It is also clear that we need to campaign amongst members to convince them that UCU is going to fight over USS again, and not allow USS and UUK to impose outrageous contributions on members or trigger the dismembering of the scheme as it becomes too expensive.
I have launched a petition which members need to sign and share.