There have been further developments in the current industrial dispute over reforms to the USS pension scheme, which could lead to the suspension of industrial action if union members support it.
On Friday (23 March), Universities UK (UUK) and the University and College Union (UCU) announced that during further talks mediated by ACAS last week they agreed a new proposal to pause benefit reform discussion to get an expert opinion of the valuation of the USS pension scheme. Both parties believe this is a positive development to build trust and confidence. The proposal will be discussed by UCU branches on Wednesday (28 March). It will then be for the UCU higher education committee to decide on the further process for consulting all UCU members through a ballot. Support for this process will also need to be obtained from the USS Trustee and the Pensions Regulator.
The key elements of the proposal are:
- A joint expert panel, comprised of actuarial and academic experts nominated in equal numbers from both sides will be commissioned to deliver a report. Its task will be to agree key principles to underpin the future joint approach of UUK and UCU to the valuation of the USS fund. This will require the status quo both in terms of contributions into USS and current pension benefits, until at least April 2019.
- A jointly agreed chair whose first step will be to oversee the agreement of the terms of reference, the order of work and timescales with the parties. Any recommendations by the group must be based on a majority view of the panel without the use of a casting vote. A secretariat, jointly agreed by the parties, will be appointed.
- The panel will focus in particular on reviewing the basis of the scheme valuation, assumptions and associated tests. It will take into account the unique nature of the HE sector, inter-generational fairness and equality considerations, the need to strike a fair balance between ensuring stability and risk.
- Recognising that staff highly value defined benefit provision, the work of the group will reflect the clear wish of staff to have a guaranteed pension comparable with current provision whilst meeting the affordability challenges for all parties, within the current regulatory framework.
- The panel will make an assessment of the valuation. If in the light of that contributions or benefits need to be adjusted in either direction, both parties are committed to agree to recommend to the joint negotiating committee (JNC) and the trustee, measures aimed at stabilising the fund to provide a guaranteed pension broadly comparable with current arrangements.
- Alongside the work of the panel both sides agree to continue discussion on the following areas: comparability between Teachers’ Pension Scheme (TPS) and USS; alternative scheme design options; the role of government in relation to USS; and the reform of negotiating processes to allow for more constructive dialogue as early as possible in the valuation process.
We will provide further updates as events occur during the week.
