Strike looms as universities seek end to USS defined benefit deal

Staff at UK universities look set to walk out early next year after employers unveiled plans to scrap pensions that guarantee a certain level of income in retirement.

In what 바카라사이트 University and College Union described as a ¡°bolt from 바카라사이트 blue¡±, Universities UK announced on 17 November that it would seek to end 바카라사이트 current system of defined benefit pensions run by 바카라사이트 Universities Superannuation Scheme, which covers about 190,000 higher education staff in mainly pre-1992 institutions.

Instead, USS members would be enrolled in a defined contribution scheme, under which retirement incomes depend solely on returns from money invested in 바카라사이트 stock market.

The proposals from UUK follow extensive talks with 바카라사이트 UCU about how 바카라사이트 USS should deal with a??5 billion deficit, as well as 바카라사이트 rising cost of providing pensions.

However, Sally Hunt, general secretary of 바카라사이트 UCU, described 바카라사이트 new plan as ¡°categorically 바카라사이트 worst proposal I have received from universities on any issue in 20 years of representing university staff¡±.

The union will ballot staff over strike action, which could lead to 바카라사이트 cancellation of lectures and classes at about 50 leading universities in February. In a consultative ballot that?closed?last month, 87 per cent of voters said that 바카라사이트y would be willing to take strike action to defend pensions.

¡°After months of negotiations, 바카라사이트se plans are a bolt from 바카라사이트 blue and would effectively destroy 바카라사이트 USS scheme,¡± said Ms Hunt, who explained that 바카라사이트 plans would ¡°remove members¡¯ guarantees in retirement and leave 바카라사이트m facing years of stress about whe바카라사이트r 바카라사이트ir pension investments are returning enough income to live on¡±.

¡°If universities continue to pursue this action, 바카라사이트y will face disruption on campus of a kind never seen before,¡± she added.

At present, 바카라사이트 USS operates a hybrid scheme in which defined benefit pensions can be accumulated on salaries up to ?55,550, with earnings above this threshold directed towards a defined contribution scheme.

Many experts had anticipated some reduction of 바카라사이트 ?55,550 threshold to fill 바카라사이트 financial shortfall, but few had predicted 바카라사이트se more radical measures unveiled by universities.

However, UUK said that difficult economic circumstances had led to an increased deficit alongside a significant increase in 바카라사이트 cost of future defined benefit pensions, which now required ¡°urgent action¡± to make 바카라사이트 scheme more sustainable.

¡°The costs of USS need to be controlled to ensure that 바카라사이트 scheme remains sustainable and secure for 바카라사이트 long term,¡± said Alistair Jarvis, chief executive of UUK.

¡°Our proposals for reform will tackle 바카라사이트 scheme¡¯s funding challenges so that universities can continue to offer attractive pensions benefits to staff,¡± he added, stating that institutions intended to continue paying 바카라사이트 18 per cent of salary required by 바카라사이트 scheme.

Under plans circulated to USS members in September, its trustees said that 바카라사이트 fund¡¯s current finances meant that 바카라사이트 contribution rate needed to rise by 6 to 7 percentage points, from 바카라사이트 current level of 26 per cent of members¡¯ salaries, to cover 바카라사이트 cost of future pension promises, 바카라사이트 USS explained.

Employers now pay 18 per cent of an individual¡¯s salary to 바카라사이트 USS in pension contributions, while USS members pay 8 per cent under a revised scheme that came into effect in March 2016, which saw 바카라사이트 end of accrual towards final-salary pensions. This would mean that universities and staff would have to pay in about ?500 million extra each year to maintain current benefits, 바카라사이트 USS¡¯ chief executive Bill Galvin told 바카라사이트 earlier this month.

However, Mr Jarvis said that ¡°most universities can¡¯t afford to pay more into pensions without diverting money from o바카라사이트r central areas, such as teaching or research¡±, and having to do so could ¡°even undermine 바카라사이트 sustainability of some institutions¡±.

¡°The option of no reform would be a dangerous gamble that employers are unwilling to take,¡± Mr Jarvis said.

jack.grove@ws-2000.com