Students Staff
University of Essex

November 15, 2019

Safeguarding our pension

As a Vice-Chancellor of a university that is a member of the Universities Superannuation Scheme (USS) and a member myself, the inability of those who decide our pension arrangements to ensure we have a fair and sustainable scheme, is a source of regret and dismay.

The vote by University and College Union members for 8 days of strike action in 60 universities is one that I know individual members will not have voted for lightly and reflects the strength of feeling about the future of USS and working conditions. I also know that our staff have a profound and deeply felt commitment to the University and the success of our students.

Continued failure to deliver an agreed basis for the future of the pension scheme will not only affect the sustainability of our universities, but negatively impact on our ability to recruit and retain global academic and professional services talent in our universities.

At the University of Essex, our Council is the employer of all staff and we have held a series of open meetings to help inform the position of our Council. This input from staff led to our University Council adopting positions that have been held consistently for many years.

  • We believe high-quality pension arrangements are a significant part of the benefits available to our employees.
  • We feel the USS trustees are being overly prudent in their assumptions, which undervalue assets and overestimate liabilities.
  • At Essex, we remain willing to increase employer contributions to the scheme, to sustain critical features of the USS, including defined benefits.

We know some or all of these are inconvenient truths – as some senior figures in the sector have made clear to us at Essex. Undaunted, we continue to be an advocate for what we believe is right.

In 2018 we had a painful and disruptive strike that dragged the parties to the negotiating table. It is a matter of enormous pain and regret that we again find ourselves in a position that the negotiators who represent us – both employers and employees – are not willing to embrace principled compromise in seeking a solution to our pensions crisis. Should positions remain unchanged, no side will win and the most likely outcome is that a solution will be forced on us by the pensions regulator, who has the legal authority to break the pensions deadlock and impose a solution. I have no doubt this will be a profoundly unsatisfactory outcome for those that share our view about USS.

For our part at Essex our Council remains committed to paying more into USS to safeguard key components of a defined benefit pension scheme, but if the scheme is to remain unchanged employees should also be willing to contribute more, reflecting a shared commitment to the value of the scheme. However, we are concerned about the extra level of employee contributions and the impact this is having on affordability for some staff, especially if they feel forced to leave the USS scheme. We also recognise this is a national pension scheme and if universities and colleges leave USS, ultimately this will also undermine the viability of having a national university pension scheme.

We are calling for:

  • the Joint Expert Panel – the UCU and Universities UK-nominated expert panel of six with an independent Chair – to accelerate its work and to stake out where the common ground might be for the future. This might include, for example, differential contribution levels, so that USS members on lower salaries contribute a lower percentage of their pay to the scheme in a manner similar to the Teachers’ Pension Scheme, or smoothing contribution increases over a longer period to ensure that the funding of the scheme reflects the long-term nature of the assets and liabilities of a pension scheme. A report prior to the commencement of strike action is urgently needed; and
  • employer and employee representatives to return immediately to the negotiating table without preconditions on either side.

Pay awards are determined through national collective bargaining and so long as we remain a part of these arrangements, we are bound by this scheme. We recognise the impact that inflation is having on the value of pay, but many universities feel the current offer of 1.8% for most staff, with higher levels of increase for the lowest paid, is at the limit of affordability. In this context, our ability to shape the agenda on pay is extremely limited.

However, this dispute is also about equality, casualisation and workloads within universities and these are areas where we have greater scope to chart our own course.  At Essex we have taken a values-led approach to these issues including:

  • taking concerted steps to de-casualise our workforce;
  • tackling head-on the issue of equal pay for work of equal value – the difference in pay between men and women for doing the same job – with the University having no significant pay gaps at all across all grades. We have also made some (but not enough) progress in closing the gender pay gap – the difference between average earnings of men and average earnings of women – which has reduced by 2.4% in 3 years to 16.2%;
  • announcing a massive investment in staff, something our students have said really matters to them and the quality of their learning. The largest recruitment of academic staff in the history of the University is now underway, which will improve our student to staff ratio to 14.6 to 1– the best we have had at Essex for many years. Important to us, is that this will help our staff have more time to develop their careers and improve their work life balance. We recognise that in addition to hiring new staff there is more that we must do, to ensure workloads are more manageable.

There is no doubt there is more that we can and must do and in particular work is underway to speed up closing the gender pay gap – which remains unacceptable – and to bring an equal focus to ethnicity pay gaps. We are also consulting on our People Supporting Strategy to ensure we continue to invest in staff success.

A concerted period of industrial action will inevitably have a negative impact on our students, notwithstanding our efforts to minimise this. As a result, at the University of Essex we have taken the decision to make a mitigating payment to students who have lectures and classes cancelled as a result of the strike in recognition of the reduction in learning opportunities that they will experience – and we are working with the Students’ Union to finalise our plans.  We also know that financial payments can never fully offset the impact of strike action on our students’ overall University experience.

There is an obligation on all parties to return immediately to the negotiating table without preconditions, to move on from win-lose strategies – and to recognise that principled compromise is the answer.  Jane Hamilton, the Chair of our Council has met this week with our Essex UCU branch representatives to discuss the University’s position and to ensure at Essex that we have an open dialogue about the shared challenges that we face. If we fail to find a negotiated settlement, the future of our pensions will be resolved by the regulator – and few will find much solace in that outcome.

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