The USS 2020 pension valuation is a catastrophe. Yet UUK is using this catastrophic valuation to push through significant cuts to the pensions of current staff and future generations of university staff. UUK has been misleading employers and scheme members throughout the consultations and is now aiming to push these cuts through in February.
This is why we need a strong ballot result in January.
Misleading statements, repeated at Exeter and the actual cost of the Backstop
UUK, the committee of Vice-Chancellors, is repeatedly producing misleading information about negotiations, the level of cuts and the cost of maintaining benefits. This information is being repeated by University leaders. For example all staff at Exeter were emailed on 1 September with the following
we may be able to avoid the significant planned increase in employee and employer contributions – from 9.6% to 18.6% for employees and from 21.1% to 37.6% for employer
These threatened percentage increases to 18.6% and 37.6% are both incorrect. They refer to a set of figures from April 2021 showing the much worse Scenario 1 from page 13 of the UUK report on the 2020 valuation. By the date of the email to all Exeter staff, these figures had been superseded by the Backstop of the 2020 valuation Schedule of Contributions. The full Schedule of Contributions includes a second leg or ‘backstop’. The backstop allows full USS benefits to be maintained at the current contribution rates through to April 2022, with rises to 9.6% and 23.7% (employees, employers) from April 2022 to October 2022. As Mike Otsuka shows, these extra costs to maintain full benefits to October 2022 would be £240 for someone on a salary of £40k, yet would earn back £1,500 in today’s money, even if CPI stays at 2.5%.
It is possible to show that the cost to Exeter University of maintaining full benefits to October 2022 is less than Exeter budgeted for the October 2021 rises. Exeter’s Financial Statements show, on page 8, note 29, that the annual employers pension costs for USS are £33 million.
Exeter would have budgeted for the planned October 2022 rises from 21.1% to 23.7% and this budgeted cost would have been £3.4million. Instead these rises were replaced by contribution levels of 21.4% that can lead to either UUK cuts or the backstop. The backstop has contribution rates increasing to 23.7% from April to October 2022. This means the cost of the backstop (preserving full benefits to October 2022) is £1.2 million LESS to Exeter than the original planned October 2021 rises. Any claims that Exeter cannot afford the backstop need to be seen in light of these up-to-date contribution rates.
In the same email of 1 September, the Registrar omits any mention of the CPI cap of 2.5% on the UUK proposed cuts to pensions. Yet they repeat the claims that UCU did not put forward proposals. UCU did put forward proposals and this misinformation is being widely used by UUK and Vice Chancellors. In fact, UCU tabled costed, formal proposals as agenda item 3.2 of JNC papers for the meeting of 13 August for discussion. Sam Marsh, USS UCU negotiator, has offered to update VCs on the proposals. The alternative UCU proposals alongside UUK cuts are detailed clearly in the table in this WonkHE article. However UUK refuses to provide covenant support for anything other than their proposed cuts. This raises the cost of any other proposals and renders negotiations on alternative proposals. UCU has since sought legal advice and Jo Grady has since written to Bill Galvin outlining the legal case.
What is UCU asking for?
Furthermore the UCU proposals operated within the catastrophic 2020 valuation and those UCU proposals are now superseded by the dispute letter which calls for withdrawal of the cuts under the lower-cost backstop, and a new evidence based valuation. This is the resolution which will be best for staff, employers and students alike.
Why do we need a new evidence based valuation?
The 2020 valuation is described by Martin Wolf, Financial Times chief economics commentator as ‘insanely pessimistic’. He later wrote that he did not condemn university staff taking strike action, given they are
…the victims of unduly risk-averse decision making at the Universities Superannuation Scheme, under the influence of misconceived regulation.
The extreme nature of the 2020 valuation can be seen in the graph alongside, which is updated from Sam Marsh’s USS Briefs 106. The 2020 valuation prudent assumption of asset growth is shown by the pink dashed line that rises just above the horizontal. USS are claiming that a 2021 valuation would produce the same result as a 2020 valuation by downgrading the prudence even further from the ‘insanely pessimistic’ 2020 valuation.
What is UUK doing about the catastrophic state of the valuation?
UUK has claimed in an excruciatingly badly edited press-release on 30 November that “a small minority of staff seem determined to strike in protest at economic conditions they do not like, and a regulatory regime that universities are powerless to change.” [our emphasis]
But UUK’s own website boasts of their influence over regulation, so they cannot also claim that universities are powerless to change regulation.
In particular their Policy and Research pages lead with how influential their work has been in shaping developments including in regulation. While UUK’s Campaigns page leads with how the UUK brings ‘universities together to show the role they play in creating a better society and world, and to campaign for issues that matter to us.’ Clearly pensions regulation does not matter to universities or they would be campaigning and dedicating resources, including their 20+strong research team to developing policy papers.
Further evidence for the lack of any effort by university leaders to address the issues impacting on the USS pension can be seen in the slides presented by Adam Tickell, Chair of the Employers Pension Forum and Stuart McLean, UUK Head of Pensions in their plenary talk to the Committee of University Chairs in October 2020.
The slide shown above on ‘strategic outcomes’ only includes cuts to staff future pensions, and nothing at all about lobbying for change. There is nothing in the entire presentation on lobbying, legal action or governance reform.
UCU, staff and students have been lobbying for changes to policy and regulation for years. We have all collectively been using every lever available including political lobbying, negotiations, legal action and industrial action.
University leaders appear only to be misleading us at every turn, while failing to demonstrate the existence of any work at all to protect staff pensions. .
The only option that seems available to staff to protect the future of the universities is more industrial action.
Find out more in Exepose articles: Issue 724/ 9 Nov 2021 pp.6-7
Pay and inequalities
Vice-chancellor pay exposes ‘cavernous’ gap between staff & management. According to the Office for Students report into senior staff pay in English universities, the average remuneration for vice-chancellor for the 2019-20 academic year stood at £269,000 per year. The University of Exeter was at the top of the list, as the head of the provider received a pay and benefits package of £584,000. Jo Grady, general secretary of the UCU: “Vice-chancellors…should now look their staff in the eye and explain why they can’t provide proper pay rises, decent pensions and secure contracts”
Please click here for full UCU’s response and ITV news coverage. See also for reference, our Committee motion (12-02-2019) “EUCU condemnation of the University payout to Vice Chancellor Professor Steve Smith and senior staff, and request for review of University governance“.
Workload has been a long standing issue for Exeter UCU members and is a concern which, for many, has been exacerbated during the pandemic and associated lockdowns last year. However, UCU members have not noted improvements or lower workloads this academic year and, in some cases, feel that new and enhanced expectations created during the move to remote teaching have persisted now that many are back teaching face to face, without workloads being adjusted accordingly.
A Exeter UCU Survey found that 91% of respondents frequently had to work above the hours listed in SWARM, and noted the far-reaching impact their workload was having, with colleagues describing how:
- Workload was ‘challenging and draining before but an absolute nightmare this year’,
- ‘I am seeing my mental health crumbling and I don’t know what to do to be more efficient‘.
- ‘I am at breaking point. I often find myself in tears sitting at my desk and colleagues are the same‘.
Excessive workloads are concerning for all but are, perhaps, particularly concerning for those on temporary teaching contracts and those at the earlier stages of their careers, as it was noted that excessive workloads risk harming the quality of their research outputs and risk damaging their careers.
We also know from UCU research that this is a widespread problem across the sector, with average working week in higher education above 50 hours, and 29% of academics averaging more than 55 hours. All colleagues at the University of Exeter are invited to complete the UCU workload survey until 20th of December.
The scale of the problem.
- One third of all academics working in academia are employed on fixed-term contracts. In Exeter this figure is nearly half: 48% of all academic staff (1505). This figure rises to almost half for teaching-only academics (44%); in Exeter this figure is nearly two-third (63%, 625). The number across the UK rises over two thirds (68%) for research-only staff; in Exeter this number is 87% (830). Please see Table A1 based on 2019/20 HESA data in UCU report here.
- Across the sector, there are 66,115 academic staff employed on ‘atypical’ contracts which will include those on the most casualised forms of contract. In Exeter, the figure is 1230 (see Table A2 in the report).
The levels of fixed-term contracts are one indicator of casualisation but do not necessarily tell the whole picture. Moving away from using fixed-term contracts to permanent/open-ended contracts is a positive step but we also need to ensure that any new permanent open-ended contracts do improve security of employment and are not merely contracts with a ‘likely redundancy date’ included. In Exeter, we have worked around the recent branch’s claim on anti-casualisation, but we are far from where we want to be. Progress has been made in removing the two-tier system of open-ended contracts with the removal of specific end dates of external funding for those in research-only roles. The reality is that those moved from fixed-term to open-ended contracts (following the four years of continuous fixed-term employment at UoE) remain in a precarious position.
Although the university is legally obliged to try and redeploy these permanent staff members, this is partly compromised by the university’s own redeployment procedure. The standard practice is to assign a staff member redeployee status (and so priority for job selection) only 3 months prior to the end of external funding. This limited time frame reduces the chances of successful redeployment. They may apply before the 3 months without redeployee status, but then they compete in the same way as when applying for a new job, which is clearly not redeployment. In the last HR-UCU monthly meeting, HR indicated that the UoE redeployment procedure will not be changed to ensure standardisation of the procedure across the university. However, the focus should be on safeguarding and ensuring successful redeployment, on a case-by-case basis, rather than on enforcing arbitrary standard procedures that may work in some cases but not in others. Furthermore, leaving redeployment to the last minute may not be possible for some, for instance, for those with a family or mortgage to protect.
There is currently no regulation about how researchers are named on grants secured by PIs. Some freedom for PIs to choose researchers for grants can be effective at promoting a researcher’s career and retaining expertise. However, this does not mean that no consideration should be given to the pool of researchers facing re-deployment. There is no significant discussion between academics across a school about how the pool of researchers facing redeployment might be redeployed. More joined-up thinking is required which should exceed the limited discussions between the researcher and their supervisor. To safeguard a researcher’s career requires consideration of the trajectory of that person’s particular career. For instance, whether they are in a good position to move on to a new institution, or whether they are not and require additional support. PIs and HoDs require training so that they fully understand the obligations of redeployment and act accordingly in a meaningful way. An additional measure to safeguard a researcher’s career would be some kind of independent monitoring of career progression.
Bridge funding would be effective in cases when the researcher requires more time to write-up work and publish so that they can then move forward positively. This requires case-by-case consideration of researchers’ career trajectories.
Other worthy news articles and media coverage
Blog under construction…
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Please vote yes and vote early!
The ballots close on Friday 14 January.
If you are a postgraduate student, but have a contract to teach (Postgraduate Teaching Associate), then you can change your membership from ‘student membership’ to ‘standard free membership’. Individuals who hold the ‘standard’ and ‘standard free’ membership will be entitled to vote in industrial ballots. For more details click here. See also UCU guidance for postgraduate researchers on how to support and take part in the ongoing industrial action here.
New and replacement ballot papers
Members who’ve lost or cannot find their ballot paper can request a replacement from 9am, Monday 13 December 2021 (up until Friday 7 January 2022) using this form. Eligible new members will automatically be sent a ballot paper if they joined prior to Tuesday 4 January 2022.