Human Resources

USS 2018

In February and March the higher education trade union, University and College Union (UCU), carried out industrial action at Sussex and more than 60 other universities in a national dispute over the future of the Universities Superannuation Scheme (USS), one of the pension schemes/arrangements for university staff.

Message from the Vice-Chancellor 19 March

It would be an underestimation to say that it has been a difficult time for Sussex and the sector over the last two months. The impact of the industrial action on our students, as well as those staff who have been striking and those who have not, is unprecedented in my career, as I know it is for many of you.

I have heard from thousands of people in our community who feel strongly not only about the issue of pensions and their futures, but the implications the strikes could have on our students’ futures.

My clear priority is that our students must continue to receive a high-quality education and I have written to our student body today to reassure them of that commitment.

However, I want to address two specific areas that I have been asked about by many staff. These are: my role at the talks at Acas; and my own – and the University’s - position on some of the substantive issues. It’s important that I address these as, just as we must ensure good relationships with students, I want to maintain respect and cohesiveness amongst our community of staff.

These are complex issues and my message is necessarily a long one. For those who don’t make it to the end, I wanted to say at the outset that I am holding two open events for staff - one at 3pm on Thursday (22 March) and the other at 12.30pm on Friday (23 March) – please register to attend. Everyone is welcome and I am prepared to listen, and to respond to people who don’t agree with me. I know that Senators will also have many questions for me at this week’s Senate meeting and I want to assure colleagues that I will be answering these fully.

Acas talks between UUK and UCU

I first want to address questions about my involvement in the Acas talks.

UCU and representatives from UUK met under the auspices of Acas (the Arbitration, Conciliation and Advisory Service) on Monday 5 March for the first time. Acas is a dispute resolution service that seeks to find common ground during periods of industrial dispute. The first meeting broke up very quickly and it was clear both to the Union and the employers that there was very little trust.

The CEO of UUK, who was himself not involved in the negotiations at the time, consulted with the President of UUK and the chair of the Employers Pension Forum and they agreed that the UUK team should include both the CEO and a vice-chancellor who had existing relationships with the two most senior members of the UCU negotiating team. I have strong pre-existing relationships with, and respect for, both Sally Hunt and the UCU HE lead Paul Bridge and was convinced that the only way that there could be a harmonious outcome is if the employers accepted the principle of maintaining Defined Benefit pensions. However, unlike some other VCs who have spoken publicly, I strongly believed – as I still do – that resolution requires hard, unloved and often unseen work.

During the week that I was involved in the talks at Acas, both sides reached a shared proposal as to how the dispute could be settled. All of us concluded the talks believing that the maintenance of Defined Benefit would be sufficient to end the dispute.

I know that I have been portrayed as being a hard-line employer representative – the truth is that all members of both negotiating teams worked tirelessly to reach a compromise, recognising that there were four players: employees, employers, the USS Trustee Board and the Pensions Regulator.

There was considerable movement during the talks at Acas and every vice-chancellor that I have spoken to personally over the last week shares my own view that USS should continue to offer a Defined Benefit package.

Valuation of the scheme

The second issue I wish to address relates to the valuation of the pension scheme. More specifically, some staff (and a small group of students) have asked how Sussex responded to the consultation on the valuation of the scheme last summer. I can confirm that we believed the September figure represented a fair valuation of the risk and this is how Sussex responded to the UUK consultation. In governance terms, the University’s Executive Group recommended this position to senior independent members of our Council, who confirmed they were in agreement with our assessment.

Although it is not something that can be determined by either UCU or UUK, both parties found common ground that independent work on the valuation methodology should be undertaken. If this work finds that the methodology is flawed, we also agreed during the Acas talks that it will be used to try to persuade both the USS Trustee Board and the Pensions Regulator that this methodology should be changed. This will not be a rapid process and it will need to be independent of anyone who has a financial stake in the outcome if it is to have any chance of success. There is also, of course, the possibility that it will find that the valuation methodology is insufficiently robust.

Without a change in the valuation methodology, there are essentially two options available to address the deficit.

In order to maintain the current USS benefits, payments to the pension scheme would have to rise substantially. UCU’s advisers have estimated this at 9% of pay, whilst UUK’s advisers have estimated this at 11% of pay. Even at the lower end, this would lead to an increase in employer contributions from 18% to 24% of pay and increase in charges to individual members of staff from 8% to 11% of pay. It is not for me to assess the affordability of a 3% pay cut for members of staff. However, for the University of Sussex, this would equate to additional costs of £6 million a year. Unfortunately, the only way that such costs could be managed would be through substantial reductions in the number of people who work at Sussex. Nationally, the ‘no change’ option would lead to thousands of fewer jobs in UK universities.

The alternative option is to reduce the benefits accrued through membership of the scheme. No one welcomes this and the compromise proposal that we reached at Acas attempted to balance the interests of members who are likely to keep their jobs with those who would lose them or never get them. The proposal would ensure that more than 50% of USS members retain full Defined Benefits. As the talks at Acas have concluded, however, I do not anticipate having any further role at the moment.

Reaching a resolution

I have raised these matters here so everyone is aware of the situation that Sussex, and all the institutions in the USS scheme, are faced with, and so that we can continue to have transparency on the University’s position.

Even at this late stage, I really hope that UUK and UCU are able to reach a resolution to the dispute. It won’t be easy: feelings are running high on both sides, but the alternative is continued damage to the collective endeavour at Sussex, the education of our students, and the reputation of UK higher education. I know that none of us wants that and I will be putting all my efforts into working with others to ensure we do all we can to bring an end to this situation.

Adam Tickell