USS pension scheme members will have noted that our pension has become more and more expensive over recent years. This has led many low-paid staff, and that's a lot of us as the real value of salary has crashed, to opt out of the scheme. That means workers are missing out on the employers' significant pension contributions and will not accrue years of guaranteed pension income. Despite the rising cost of contributions, in 2022 savage cuts were made to our benefits. These cuts make retirement an even more distant dream for workers in universities. This led some UK academics to set up the Save The Pension, Save The Planet Crowd Justice campaign, led by Ewan McGaughey and Neil Davies (a Reader in Law at Kings College and a Professor of Medical Statistics at UCL respectively).
What are the aims of the campaign?
The original case had six grounds which have been whittled down to four over various court appearances. The following four arguments will be presented in the UK Court of Appeal next month.
- The valuation methodology used to justify cuts in 2022 assumed 0% growth of assets. This is empirically unfounded but was chosen to show a deficit of assets versus liabilities for political reasons. This legal case has led USS to increase their predictions for growth, i.e. it has moved into marginally positive territory. Historically real growth is about 5% real terms. The Crowd Justice campaign claim it was an abuse of power to build in such a stupid predicted growth rate.
The current valuation methodology now assumes 1.8% real terms growth. The disastrous 2022 Truss mini-budget meant the pension scheme lost £20 billion of assets (due to reliance on Liability Driven Investments), but despite this, the growth of interest rates means the scheme's assets will increase more quickly.
2. Cost of management of USS: why not cut these rather than benefits? USS has charged increasing amounts to run our pension scheme - costs have risen by more than 1000% since 2008. There has been no effort to justify these rising costs.
3. Cuts have had equalities impacts: younger pension scheme members are more female and ethnically diverse. As these scheme members are losing most, there are indirect equalities impact. There has been no equality impact assessment, which is required for changes of this nature.
4. Investment in fossil fuels: where's the divestment plan for USS? Fossil fuels have been terrible assets, they are volatile and USS could be left with stranded assets as other funds exit. USS should never, as scheme directors, risk significant loss to the scheme and its members.
Aren't we getting our pensions back anyway?
The USS asset base shows a surplus over liabilities of more than £7 billion, which highlights how unnecessary was the assault on pensions last year. Given the surplus, USS is consulting employers about their willingness to restore benefits and ideally to charge both employers and workers lower contributions. This will help the balance sheets of our employers, allowing them to pay us more. It is unlikely that workers in USS will resist the opportunity for benefits restoration and potentially lower contributions rates. However, until the deal is signed off, our employers and USS may choose not to reverse their chosen pension cuts.
The mood is more positive. But be aware that the potential restoration of USS benefits which were stolen in 2022 is down to this case and the prolonged and determined industrial action of UCU members. All workers in HE have reason to be grateful to both campaigns.
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