Please read this if you are in the USS pension scheme – the shit is about to hit the fan.
You may know that negotiations over changes to the scheme have been going on between UCU, the employers and USS.
The employers propose:
1. An end to the collective Defined Benefit (DB) pension scheme and its replacement with an individual Defined Contribution (DC) scheme.
Under DB, you know what you will get and what you will pay – risk is shared between scheme members and employers. Under DC, you know what you pay, you just don’t know what you will get – all the risk is transferred to individuals as members of the pension scheme. This makes a DC scheme both expensive, costs of running the scheme are not minimised and collectively shared, but even more dangerously an individual’s pension is at risk of wild variation in asset prices immediately prior to retirement. The only solution to this for the individual DC member is that they themselves de-risk their own pension with the result that they have lower returns and a still lower pension.
2. A cut in the employers’ contributions to the scheme. Rather than promise a minimum level of contribution to our pensions they will transfer all ‘de-risking’ costs to members and cut employer contributions to 12.45% for future pensions. This will rob us of our pensions in the DC scheme. When everyone is being told they need to save more for pensions – our employers are doing the opposite.
Moving everyone to DC will destroy the link between past and future staff, break the important link that ensures the DB scheme remains open to new entrants and therefore continues to grow with positive cash flows, risks destroying future pensions and has the opposite effect of ‘de-risking’ by creating the very deficit they seek to avoid.
Despite UCU opposition, the employers are determined to push these disastrous changes through – and a decision on whether to adopt them will be made on 23 January.
The only way to stop this is going to be sustained strike action and a massive public campaign!
What can IWGB members do (feel free to email me with questions – email@example.com):
1. UCU are currently balloting members nationwide for strike action. They will get the results of the ballot on the 19 January. If strike action is called at Senate House all affected IWGB members will be able to participate and we will be on the picket line. It is vital that we all take part in this!
2. Write to your MP – 50 MPS have already signed an early day motion against these changes (see sample letter at https://www.ucu.org.uk/USS-emailyourMP).
3. Write to Kim Frost to request that the University itself oppose these plans – my email and his response are below:
The University is part of the UUK employers’ group and this group represents the views of employers on the USS scheme. As you know the negotiations on the current valuation results are in progress at present.
University Secretary and Director of Human Resources
From: Danny Millum
Sent: 15 December 2017 14:47
To: Kim Frost <Kim.Frost@london.ac.uk>
Subject: Proposed changes to the USS pension scheme
As you are obviously aware, proposals to change the USS pension scheme are currently being discussed.
These proposals would see the end of guaranteed pension payments and a loss more than £200,000 over the course of a retirement for a typical member of staff.
Would you be able to clarify the University of London’s position with regard to this issue?