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Betrayed by University leadership over USS pensions

Updated: Mar 20, 2022

24 February 2022

Sussex UCU negotiators learned today that the University of Sussex Council, following advice from the interim Vice Chancellor, has voted in favour of significantly cutting Sussex staff’s future USS pensions. For early career staff this means by a third or more.

The reason given was that this was the ‘least worst option’. Sussex has not called for a revaluation of the pension fund based on the finances as they stand in 2022.

We are calling staff to:

  • join the strike for Monday 28 February - Wed 2 March;

  • join – and encourage others to join – UCU and take action;

  • share this blog with colleagues and students.

These devastating cuts, supported by Sussex interim VC and Council, are premised on a pandemic-hit valuation of £65bn of USS pension assets, which was conducted in March 2020. Since then, the fund has grown by £25bn to £90bn and completely recovered. Even by the standards of USS extreme prudence any ‘deficit’ is now insignificant. The national committee of VCs (known as UUK) has chosen to mislead and lie [ref.1] their way through the consultations while staff at universities worked under extreme conditions to support students and colleagues.

These cuts are morally indefensible. They will hit early-career staff hardest. They will amplify the inequalities which we are also fighting through the Four Fights dispute.

They are also financially indefensible. This is a betrayal, not just of staff and students, but of the very idea of a university as a community of learning.

Staff and students have not yet been given sight of the analysis and recommendations that Sussex Council considered in voting to cut our pensions. We expect reasoned and evidence-based arguments from the governing body of a university; instead we are met with indifference, bordering on contempt.

The UCU Proposals and the Financial Case are set out in the Appendices below.

What next?

This is not over and we will not rest.

Locally, we have called for all the Sussex Council papers used to decide on USS cuts to be shared with staff. We will highlight the recent Independent Governance review of Sussex which noted that the University Transparency Principles (which were for a long time confidential) are self-contradictory. The governance review noted that the ‘default position should be full disclosure’. As yet there are no papers on Sussex Direct for the Council Meeting of 18 February. We will push for full disclosure of all these papers.

Nationally, the UCU Higher Education Committee will meet this Friday to discuss further action, such as a marking boycott over the summer. We will organise a local members meeting following the announcement. We will continue to seek views across Sussex and input into national discussions and decisions.

In the media, not a single VC has spoken out, yet Jo Grady is on LBC, and in the Financial Times arguing for justice. Meanwhile, leading economists pour scorn on UUK’s position, and the FT global pensions correspondent reports

I have covered UK university sector disputes over pension cuts since 2017 and can say that I have not seen members so angry as they are today over fresh cuts to their retirement benefits. The anger has reached a new depth. This does feel like a turning point. [Jo Cumbo, FT global pensions correspondent]

We demand accountability. It only takes 7 VCs to call a meeting of UUK. VCs could choose to stop these cuts but are refusing. They hide behind the argument that this is a ‘national issue’ while betraying the institutions they represent. We need to hold UUK and VCs to account and demand governance reform of University UK leadership.

We will work with other campus unions to call for pensions justice for all staff working at universities.

A ray of hope and a call for solidarity

In contrast to the University of Sussex’s management, the Board of the Institute of Development Studies (IDS) has supported UCU’s proposals in full and publicly. The IDS is one of our sibling branches on campus, teaching Sussex students.

While IDS’s conditional support aims to protect their position as a charity facing financial uncertainty over International Development Aid cuts, their position is even more admirable compared to universities with huge budgets and reserves.

We take the IDS public support of UCU’s proposals as inspiration for a sustainable and just future. It is in line with IDS’s stated commitment to ‘transforming global knowledge to bring about equitable and sustainable societies where everyone, everywhere can live secure, fulfilling lives free from poverty and injustice.’

We call on the whole community to take heed, to organise and resist.

We are the university.

Appendix 1: UCU’s proposals

With CPI now projected to average 2.8%, UCU’s proposals would have prevented cuts of around 40% to future pensions of most early career staff. The percentage cuts are much lower for executive salaries.

The VC and Council were given the opportunity to prevent these cuts as Sussex UCU argued in their paper to Council.

UCU’s proposals were time-limited, affordable, reasonable and viable.

UCU’s proposals followed the results of the USS consultation that closed on 17 January. However, UUK sat on the proposals for over two weeks, running down the clock to the deadline of 28 February, while escalating their misrepresentation of UCU’s proposals. UUK has consistently tried to mislead about the level of cuts throughout the consultation, resorting to outright lies with their repeated claim of ‘headline 12% cuts to future pensions’.

It seems clear that Vice Chancellors were never interested in negotiating in good faith.

Appendix 2: The Financial Argument

Vice Chancellors claim that anything other than their cuts are unaffordable.

UCU’s proposals would mean an extra £1.8m investment in staff at Sussex, up to April 2023. Sussex generated a surplus of £12.7million last year, having predicted a huge deficit.

UCU’s proposals would have seen Sussex invest around 0.5% of our annual income in staff while we work on producing a 2022 valuation.

If such a relatively small investment is unaffordable, let’s consider other Sussex University projects which have taken priority:

1) £12-16 million on a student records system SAAT that never worked, and was never even legally compliant in the UK. We were promised a report into this scandal in March last year. We are still waiting.

2) £10 million on an office block next to Brighton Train station (Block J) that has never been used and did not even have a business case. Yet, Council delegated authority for the purchase to the ex-VC, Adam Tickell, even though he was on the board of the company overseeing the purchase of the building. University official communications have never discussed this Block J purchase.

3) The notorious and ongoing £200m investment in an Estates and IT ‘road map’. This ‘road map’ sees staff at risk of being moved to lower grades, widespread outsourcing and student accommodation contracts of 50 years signed over to Balfour Beatty. These student rent contracts will peg students’ rent to the high benchmark of RPI, adding to the eye-watering rise in on-campus rent since 2010. Sussex has yet to announce its ‘affordable rent’ policy.

4) The undisclosed sums of money, and staff time, spent on low-quality consultancy reports for the deeply unpopular Size and Shape programme.

This comes on top of a decade of pay erosion to a sector that suffers the largest pay gulf and increasingly exploitative working conditions. This is clearly a University that cares little about evidence-based analysis and has no interest in due diligence with regard to the £90 billion pension fund of its staff. It is a university that seems to prefer to be ripped off by an unaccountable pensions company rather than stand up for justice and equality.

[1] Some of the UUK misleading statements and lies, there are more.

On the ‘financial problems’.

Adam Tickell, Chair of the Employers Pension Forum for UUK said in May 2021 ‘the problem is we are living longer’. This is incorrect, this is not the problem. See Mike Otsuka here.

USS Employers statement 30 November 2021 claimed ‘As a result, the scheme’s liabilities are increasing at a greater rate than assets’. This is incorrect. See historic break-even graphs here, data which has since been confirmed by USS in their interim monitoring report.

On underestimating the level of cuts

In response to the UCU modeller launched in May, UUK issued a press-release on 28 May ‘...the UUK proposal would lead to a headline reduction of about 12% in future pension benefits (benefits earned prior to any change are secure and unaffected).’ [USS Employers, 28 May 2021]. The statement was repeated and remained uncorrected throughout the UUK consultations as an example of how the UCU modeller misrepresented the level of cuts.

On Employers DC contributions

As Sam Marsh has highlighted UUK is misleading the FT on the level of DC employer contributions.

Photo credit: @derekpmccormack


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