In this article, we will focus on the first ballot topic of the Universities Superannuation Scheme. We'll give you some information on the proposed changes to the pension scheme that may lead to strike action.
Why are we talking about pensions?
In our article last week, we informed you of an upcoming University and College Union ballot, where members of this trade union will be asked to vote in favour of industrial action in relation to:
- The Universities Superannuation Pension Scheme
- Pay and working conditions
In this article, we will focus on the first ballot topic of the Universities Superannuation Pension Scheme, and give you some information on this pension scheme and the proposed changes. Next week, we'll give you some more information about the pay and working conditions ballot.
What is a pension?
A pension is a regular payment that is made to a person during their retirement. There are many types of pension, and the Universities Superannuation Scheme (USS) is a private pension. This means that the regular payment comes from a fund which the person (and their employer) has contributed to during their working life. The total in the fund is invested in assets, which means the value of the fund can be higher or lower than the actual contributions depending on the value of the assets held.
There are two main types of pension:
- A defined contribution scheme (the amount you receive when you retire is calculated based on how much you pay in or contribute to your pension fund).
- A defined benefit scheme (the amount you receive when you retire is calculated based on how long you’ve worked for your employer and your salary, and is not related to how much you have contributed to your pension fund).
You can find out a bit more about these two main types of pensions by checking out these resources on the government website.
Who is USS Limited?
The Universities Superannuation Scheme is the largest private pension scheme in the UK and is the main pension scheme for universities and higher education institutions in the country. The scheme is run by ‘Universities Superannuation Scheme Limited” and provides retirement benefits to academic staff, alongside some other benefits like ill-health benefits and life insurance.
This is a hybrid pension scheme, so members receive both a defined benefit element (a portion dictated by their salary and their time with their employer) and a defined contribution element (a portion dictated by the amount they have contributed to their pension fund).
Schemes like this are increasingly rare, as they are difficult to sustain when retirement benefits due to members are not only dependent on members' contributions to the pension fund. In the UK, 89% of private defined benefit schemes no longer accept new members, and 48% of private pension schemes offer no defined benefit element.
The proposed changes
The Universities Superannuation Scheme has been working with the University and College Union (as representatives of members, teaching staff) and Universities UK (as representatives of employers, universities) via a Joint Negotiating Committee to agree on the best way for any changes required to the scheme to be implemented.
The JNC has proposed that:
The proposed changes do not apply to contribution or retirement benefits already accumulated by scheme members. However, moving forward these changes will impact people differently depending on their circumstances, on the USS website there is a useful set of videos that run through the impact on different types of scheme members.
UCU’s “Strike for USS”
Many (but not all) University and College Union members are also members of the Universities Superannuation Scheme. As UCU campaigns and lobbies on behalf of its members' interests, they are balloting members' views of undertaking industrial action in relation to these proposed changes with the aim to:
- Avoid future changes to benefits and/or increases in member contributions.
- Ask for a new approach to the valuation of the pension scheme assets.
You can find out more about the UCU campaign in relation to the Universities Superannuation Scheme by visiting the main UCU website.