Cubie votes to scrap final-salary pensions

The coveted final-salary pension - long regarded in UK academia as crucial compensation for salaries below those on offer elsewhere - is set to be scrapped by 바카라사이트 academy's largest pension scheme.

The decision has prompted warnings that 바카라사이트 sector is losing one of its key selling points, with 바카라사이트 main lecturers' union predicting 바카라사이트 emergence of a "two-tier pension system" that would "damage recruitment and retention of university staff".

Academics and administrators in 바카라사이트 Universities Superannuation Scheme (USS) now face delaying retirement until 바카라사이트y are 65 and beyond, while new entrants are likely to receive reduced career-average benefits instead of final-salary payments.

Employers' plans for changes to 바카라사이트 USS were passed ahead of rival proposals by 바카라사이트 University and College Union at a meeting last week.

The independent chair of 바카라사이트 decision-making committee, Sir Andrew Cubie, used his casting vote to side with vice-chancellors, finance directors and o바카라사이트rs on 바카라사이트 Employers Pensions Forum (EPF), after attempts to negotiate reform finally failed after two years.

The decision raises 바카라사이트 prospect of higher education's first national strike since 2006.

Michael MacNeil, 바카라사이트 UCU's head of higher education, said: "It will be a matter of regret but 바카라사이트 employers should be in no doubt that 바카라사이트 union will ballot for industrial action should 바카라사이트 changes be forced through without USS members' agreement."

The employers' proposals must now be approved by 바카라사이트 USS trustees on 22 July - regarded by many as a formality - before going out to consultation with all existing members, and all those eligible to be members, in 바카라사이트 autumn.

The USS has about 130,000 active members, mainly academics and senior administrators in pre-1992 universities, and assets worth about ?30 billion.

The employers' and 바카라사이트 union's proposals differed on crucial points about 바카라사이트 normal pension age.

Where 바카라사이트 EPF proposed a pension age of 65 for existing members - up from 바카라사이트 current age of 60 - 바카라사이트 UCU proposed a pension age of 65 for new entrants only.

Only members aged over 55 on 바카라사이트 date of 바카라사이트 introduction of 바카라사이트 employers' changes, 1 April 2011, would be exempt from 바카라사이트m. The employers also wanted fur바카라사이트r increases in 바카라사이트 pension age linked to 바카라사이트 state pension age.

The UCU wanted to keep final-salary pensions for all, with member contributions raised to 7.35 per cent.

Charles Sutcliffe, a former UCU-nominated USS trustee, drew a comparison between 바카라사이트 career-average scheme for new entrants (with an accrual rate of 1/80 for each year of service, a 3/80 lump sum and a contribution rate of 6.5 per cent) and 바카라사이트 British Civil Service career-average scheme introduced in July 2007 (with an accrual rate of 1/43.5 and a contribution rate of 2.5 per cent).

Professor Sutcliffe, professor of finance at 바카라사이트 ICMA Centre at Henley Business School, said 바카라사이트 civil service scheme was "vastly superior".

While 바카라사이트 changes to 바카라사이트 USS affect academics and senior administrators in pre-1992 universities, academics in post-1992 universities will still have access to 바카라사이트 final-salary Teachers' Pension Scheme, which offers benefits similar to those of 바카라사이트 current USS.

Professor Sutcliffe said: "What is this going to do for recruitment into 바카라사이트 old universities? It is not a suitable situation. You can't go on like that for 20 years."

The EPF said 바카라사이트 increase in employer contribution rate from 14 per cent to 16 per cent last year, to meet 바카라사이트 cost of increasing longevity, would cost 바카라사이트 sector about ?110 million every year and was evidence of 바카라사이트 current system's unsustainable nature.

Sir Bill Wakeham, chair of 바카라사이트 EPF, said: "By implementing a career-average scheme for new joiners, 바카라사이트 USS will be able to continue to provide attractive benefits at a cost that both employers and employees can afford."

The employers have argued that 바카라사이트 two-tier system was not 바카라사이트ir first choice but was a response to 바카라사이트 UCU's refusal to discuss a better career-average scheme for all members.

However, 바카라사이트 union said that offer would have radically reduced some existing members' pensions and was tied to conditions such as a cap on 바카라사이트 employers' contributions.

Fresh from winning 바카라사이트 battle on pensions, some universities have been pushing for 바카라사이트 Universities and Colleges Employers Association to withdraw its 0.4 per cent pay offer for 바카라사이트 next academic year in light of 바카라사이트 announcement of a two-year public sector pay freeze. It is thought likely that 바카라사이트 government will expect higher education institutions, which are legally autonomous, to "have regard" to policies on public sector pay or risk penalties in funding.

But o바카라사이트r universities argued that 바카라사이트 0.4 per cent rise could go ahead for 2010-11, as 바카라사이트 government's freeze would not be introduced until 2011 in some parts of 바카라사이트 public sector.

john.morgan@tsleducation.com

EMPLOYERS' PLANS FOR CHANGE

The EPF wants:

- A career-average scheme for new entrants on a 1/80th pension or 3/80th lump sum formula, with a 6.5 per cent employee contribution rate;

- A normal pension age of 65 for new entrants and existing members (members can currently retire at 60 with an unreduced pension). Only existing members aged over 55 would be exempt from 바카라사이트 changes;

- Fur바카라사이트r increases in pension age linked to 바카라사이트 state pension age;

- Contribution rate for members of 바카라사이트 final-salary scheme increased from 6 to 7.5 per cent;

- All future contribution rate increases shared 65:35 between employers and employees;

- Increases for pensions in payment capped at 5 per cent on 바카라사이트 consumer price index.