As you
will know, changes to the USS scheme were imposed on October 1.
UCU and the employers' representatives will meet in the December Joint
Negotiating Committee to establish a working group to consider future changes
to the scheme. A preparatory meeting was scheduled to be held in November
with a JNC paper on "Changes to Pension Tax Rules" on the
agenda. Whilst this is unlikely to be of interest to most UCU members,
the impact of the tax law changes is a £18000 hit on the average VC salary, so
the employers' representatives may be keen to amend USS rules to
lessen the blow on high earners. Meanwhile, all USS members have
been saddled with scheme changes that are disadvantageous when compared to the
current proposals for public sector pensions (including TPS, which applies
to many UCU members in post-1992 institutions). The key disadvantages are
these:
- Pensions based on contributions made after
October 1 are to be uprated by a capped CPI. To refresh your memory
of the cap, pensions will increase with CPI up to 5%, but if CPI exceeds
5% then the pension increase will be 5% + half of the excess, with an
absolute limit of 10% (which would be reached if CPI got to
15%). This capping is peculiar to USS and is not proposed for
public sector pensions. It is not a feature of the recommendations
of the Hutton Report.
- Capping will also affect the accumulation of
revalued earnings in the CARE section of USS (i.e. as enjoyed by anyone
joining after October 1). In contrast, in the public
sector schemes revaluation is to be at the rate of growth of average
earnings, which historically is better than CPI, let alone the USS-capped
CPI.
- The annual pension payable in the CARE section
of USS is revalued earnings divided by 80. In the public sector
they will be divided by 60. USS members will get a lump sum, which
is not part of public service schemes, but this effectively leaves the
divisor at 68 - considerably worse than the public sector equivalent.
The net
effect is that USS pensions are likely to be much worse than those available in
the public sector schemes. Our employers' representatives argue that this
is necessary to ensure the long term viability of USS. UCU believes that
the changes go beyond those necessary to maintain viability and instead are
aimed at reducing employers' costs in the longer term, to the detriment of
members.
Our employers are refusing to negotiate further on this imposed "solution" - make sure you join with us on the 30th November to get the employers to return to the negotiating table and negotiate a fair resolution to this dispute - and a fair pension for academics and academic related staff.
