University and College Union (UCU) has announced it has secured a mandate for industrial action, which will take place this academic year. The mandate covers two separate disputes, one regarding the proposed changes to the pension scheme following the 2020 valuation, and a second, which UCU refer to as ‘Four Fights’, which encapsulates pay, workload and casualisation. These are national disputes, which impact 152 institutions across the UK.
There will be seven further days of strike action from Monday 21 March – Sunday 27 March 2022 (inclusive). UCU have also confirmed that members will be continuing action short of strike, which started on Wednesday 1 December 2021, until Tuesday 3 May 2022.
Pension dispute explained
The Open University (OU) is one of more than 340 higher education and related institutions across the United Kingdom that participate in the Universities Superannuation Scheme (USS). The latest valuation of the scheme, conducted by the independent trustee board of USS, which has legal responsibility for this process, shows a significant deficit and that the cost of maintaining future benefits would require a substantial increase in contributions.
The increase in contributions the USS Trustee believes would be necessary to maintain future benefits in their same form, as well as addressing the deficit, would make the scheme unsustainable, and beyond the affordability of many institutions and members, and represents a significant risk that many members would be priced out of a pension, increasing opt out rates. The increase could also mean employers, who contribute around two-thirds of the overall contribution, are forced to make difficult decisions that could impact on future services to students. To avoid this, Universities UK (UUK), who represent the 340 employers in the scheme, has put forward alternative proposals – which, whilst opposed by UCU, were formally adopted by the scheme’s Joint Negotiating Committee (JNC) – which would address the deficit but would see some reduction in future benefits, but importantly keeping contributions at their current levels (9.8% for members, 21.4% for employers as of 1 October 2021).
Understandably, any changes to future benefits are unwelcome, but given the financial position of USS, changes to the scheme are necessary to continue to provide staff with a good, long term viable pension scheme. There will be no impact on benefits that members have already accrued in their USS pension. The recent, formal consultation with anyone who is a member or eligible to be a member – and with representative bodies (the University’s recognised trade unions) – about the proposed changes concluded on Monday 17 January 2022. Any changes to the scheme which are finally decided on are likely to take effect from 1 April 2022.
The proposals decided on by the JNC also require additional financial security measures, often referred to as covenant support, to be adopted by all scheme employers to further underpin the long-term sustainability of the scheme. The Open University has supported these measures as they help to secure a more sustainable long-term pension for our staff, and it is supportive of other measures which are part of the overall package of proposals such as the development of lower-cost pension options within USS, which we hope can make good quality pension provision even more accessible.
The issues are complex, but the University’s position is clear. The scheme must remain affordable and sustainable and recognise the trustee board’s responsibility to protect member’s interests and the rights which they build up in the scheme.
We want everyone who is eligible for USS to have a pension scheme that is accessible, affordable and sustainable, and we have confidence in UUK to represent our interests in this regard. We support the proposed changes that have been put forward by UUK and which were decided on formally by the USS JNC. It is important to remember that the USS Trustee’s formal assessment of the scheme’s deficit and cost of future pension benefits means that if no changes are made contributions must rise to unsustainable levels; therefore, no change is not an option and the proposal from UUK, confirmed by the JNC, has been consulted on. In January 2022, UCU submitted proposals that have since concluded. For the latest updates please go to the UUK Website.
Pay and conditions
For the 2021/22 academic year, colleagues across the higher education sector received a minimum 1.5% pay award, with colleagues on the lower spine points receiving up to a 3.6% increase. For the OU, this translates to a c.£5m investment in staff. Over the last three years, staff across the higher education sector have received a total pay award of at least 3.3%, with eligible colleagues also receiving an annual increment worth on average 3.5%.
We want to recognise the hard work and commitment of our colleagues with a good pay settlement balanced with our financial obligations and the need to invest in the services we offer our students. Acknowledging the difficult circumstances and extra pressures felt by staff over the last year we were also able to make an ex-gratia payment of £500 to all staff, regardless of grade and FTE in January 2021.
We have also made significant progress in giving our Associate Lecturers financial and job security, reflecting the pivotal role they play for the OU and our students.
Our priority
At a national level, whilst it is necessary for employers to continue to support the national processes to finalise the pension scheme changes, to meet the USS Trustee’s deadlines and avoid what would be unaffordable increases in contributions, we also sincerely hope that discussions can continue between our representative bodies, the USS trustee and UCU – and indeed there are important workstreams which follow-on from the valuation on the development of a lower cost pension saving options, on better scheme designs for the future which might involve some conditional elements of benefits, and on scheme governance, which we hope will be joint stakeholder projects and which we are very keen to see progressed as soon as possible.
Further information
The latest updates from UUK (who represent USS employers) and UCEA (who represent employers in pay negotiations), can be found on their websites:
