Pensions Shouldn’t Be the Focus of Strikes

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UCU has announced another wave of strikes this semester. The key issues – pay, equality, casualisation, and workloads – have not changed. 

Whilst the November strikes led to some concessions, the main demands have not been met. UCU wants universities to spend more money on staff, UUK (the organisation representing the universities) says they cannot afford this.

The pension scheme is a ‘defined benefit’ scheme: when a member retires, they have a guaranteed income for life. The money that the member and  employer put into the pension scheme over the course of the member’s career does not have a direct bearing on the size of pension they receive. Instead it is based on factors such as their final salary and amount of time paid into the scheme. 

This scheme contrasts with a ‘defined contribution’ scheme, the main type of scheme used in the private sector. In such a scheme the money the member and employer put into the pension over the course of the member’s career is the pot of money that forms the member’s pension. Defined benefit schemes are generally better for members, both in the amount of money they receive and the security of income, as their pension cannot run out.

In contrast, for defined contribution schemes your pension is a pot of money that can run out. Converseley, defined benefit schemes are more expensive to run, and need more money contributed to ensure the pension fund will always have enough money to pay its members.

Applying this to the current situation, there is a 6.6 billion pound deficit in the USS. There is not currently enough money to pay everyone’s pensions. To close this, more money needs to be contributed. UUK proposed that both members and universities should increase their contributions. 

Members would increase their contributions by 1.6%, while universities would increase their contributions by 2.6% per person. UCU says that the universities should cover all necessary increases in contributions; UUK responded that universities cannot afford this.

In the current UUK offer, employers would be contributing the equivalent of 23.7% of employees’ salaries towards pensions. This is a huge amount, nearly five times more than most workers; in most defined contribution schemes employers  contribute 3-5% of employee salary.

The USS is a better scheme for employees than the alternative defined contribution scheme. Since there is a deficit that needs to be closed in order to keep the scheme running, there is no alternative other than someone having to pay more. The current offer, where universities increase their contributions more than members, is fair considering the deteriorations in pay and conditions university staff have suffered.

Given this, UCU should focus on the other demands, where there is more room for negotiations. Since universities are struggling to pay for existing employees and their pensions, the use of zero-hour contracts is only going to increase unless there is some give in UCU‘s demands.

Casualisation of the workforce is a more pressing issue than pensions. Not wanting to pay more money for the same thing is an understandable point of view for those with USS pensions, but for the members of staff on zero-hours contracts with no pension or security of income now, let alone in the future, it is hard to say that the two issues are of equal urgency.

Pension contribution agreements and annual pay increases apply to all Universities involved in Universities UK across the country, not just Leeds. Higher Education Pay increases this year were at least 1.8% for all staff with 45% recieving pay increases of 4.8%. This is according to the University of Leeds For Staff page on Pay 2019-20. Student support teams will be available for students from the LUU Advice Team, Schools and student counselling. Libraries and other services will still be available. Check individual websites for opening times during the strike period.

Image Credit: Which Reviews