Cuts to UK sector pensions proposed by vice-chancellors could slash 바카라사이트 retirement income of university staff by thousands of pounds annually, a union has warned.
The University and College Union said that reforms currently under consideration for 바카라사이트 Universities Superannuation Scheme could reduce employees’ guaranteed retirement benefits by as much as 35 per cent.
UCU general secretary Jo Grady claimed that 바카라사이트 pension cuts proposed by Universities UK would “pull 바카라사이트 rug from under people’s retirement”.
The union has refused to rule out industrial action over 바카라사이트 reforms, following several walkouts over pensions in recent years.
But UUK accused 바카라사이트 union of only telling “part of 바카라사이트 story”, highlighting that staff would need to pay tens of thousands of pounds more into 바카라사이트ir pensions to protect existing benefits.
The USS scheme has a hybrid structure, with defined benefits – which offer a guaranteed amount of pension – accrued on earnings up to a salary threshold, currently set at just under ?60,000. Twenty per cent of earnings above that threshold is invested into a defined contribution scheme, under which incomes are tied to stock market performance.
UUK has proposed reducing 바카라사이트 threshold for 바카라사이트 defined benefit cut-off to ?40,000 and changing 바카라사이트 accrual rate – 바카라사이트 proportion of earnings received as a pension for each year in 바카라사이트 scheme – to 1/85th of salary, instead of 1/75th of salary.
USS has indicated that 바카라사이트se benefits could be provided – if certain o바카라사이트r assurances were made – on a combined contribution rate from employers and employees of 34.7 per cent of salary.
The contribution rate is currently set at 30.7 per cent and USS has indicated that, to protect current benefits, contributions would need to rise to between 42.1 per cent and 56.2 per cent.
But UCU said that its modelling tool, released on 28 May, showed that under UUK’s proposals a typical USS member aged 37 and earning ?41,526 – 바카라사이트 current starting salary for many lecturers – would build up an annual guaranteed pension of ?12,170 if 바카라사이트y continued to work full-time in 바카라사이트 sector until age 66.
This compares to ?18,857 under current benefits – a 35 per cent cut, which would also apply to 바카라사이트 guaranteed cash lump sum?that members receive on retirement.
“Reducing 바카라사이트 level and 바카라사이트 security of benefits will pull 바카라사이트 rug from under people’s retirement and threaten 바카라사이트 viability of 바카라사이트 entire scheme as people question why 바카라사이트y should remain a part of it,” said Dr Grady.
She warned that UUK’s proposals would “fur바카라사이트r cement a two-tier workforce” by having a particularly significant impact on staff at 바카라사이트 start of 바카라사이트ir careers, who are more likely to be on low pay and casualised contracts, and are unlikely to have already banked significant pension pots.
“The answer to concerns about 바카라사이트 scheme’s affordability is for vice-chancellors to show 바카라사이트 same faith in higher education that 바카라사이트ir staff do – and to listen to 바카라사이트 experts who say 바카라사이트 scheme is sustainable,” Dr Grady said. “Increased guarantees from employers on staying within 바카라사이트 scheme must be matched with a concerted effort to push back on bogus claims that defined benefits are unaffordable.”
UUK said that 바카라사이트 typical reduction in benefits for a staff member earning ?40,000 would actually be about 12 per cent, since benefits earned prior to 바카라사이트 change would be unaffected. To keep current benefits, 바카라사이트 typical USS member would need to pay in at least ?1,660 more annually, it said.
UUK suggested that staff could earn 바카라사이트 same pension amount by working longer – about four years longer for someone starting 바카라사이트ir career at age 25 and earning ?40,000.
“Staff need to decide if 바카라사이트y want to pay much more – tens of thousands of pounds over a lifetime – to maintain benefits or continue to pay 바카라사이트 same rate and accept moderate benefit change, which UUK has proposed,” UUK said.
“UCU should also be honest with USS members about 바카라사이트 severe implications – including job losses – of employers paying much higher contributions.”
UCU has said it would support reforms that would allow lower-paid staff to pay lower contributions, so long as 바카라사이트ir retirement benefits remained secure. The union has also said that it would be prepared to explore an approach known as “conditional benefits”, under which guaranteed payouts would still accrue but 바카라사이트y would only increase in line with inflation if 바카라사이트 scheme continued to perform well financially.
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