With the raising of university tuition, Vice-Chancellors have been accused of being fat cats creaming off the increased fees. Yet the financial position of most academics is far from secure.
The University Superannuation Scheme (USS) – the pension fund for more than 390,000 academics – now has the largest pension debt of any UK pension fund, with a deficit of £17.5 billion.
The deficit is a result of poor management and failed stock market investment following the 2008 financial crisis.
Ben Goldacre, an Oxford university academic, has accused the USS of using “dodgy assumptions we wouldn’t tolerate in research”.
USS has claimed that to keep retirement benefits at the current levels, contributions from employees and employers would have to be raised from 26 per cent to over 32 per cent: something that the employers reject.
The pension crisis is likely to have a profound impact on academia and universities on a wider scale. There have been suggestions that tuition fees will be diverted away from teaching and research and into the struggling pension fund.
This could cause a decrease in the standard of teaching in UK universities.
Furthermore, one of the main draws to academic jobs is the pay and the promise of a good pension. However, lower pensions and reduced take home pay, with an increase in pension contributions, means the overall benefits of an academic career may be in decline.
At a time of uncertainty this may mean a smaller academic market and a decline in the quality of those working in Higher Education.
Academics are becoming increasingly concerned about the pension scheme and the employer’s reaction. The lecturers’ union, the UCU, is currently consulting members over future options, including the possibility of going on strike.
The danger remains that unless the situation is resolved, there could be serious disruption in Britain’s universities.