y UCU Left y Join us at uculeft.
org y
Defend collective
pensions
J End marketisation
ust as climate change deniers refuse
to acknowledge the evidence of
climate change so our pension
scheme is being driven into the ground
by pension deficit doom-mongers who
ignore reality.
USS has been forced to reveal that the
scheme has an £8bn cash surplus, and
was in surplus to the tune of over £3bn
when it was moved from final salary
into 2016. The real surplus has grown:
so what is the problem?
They have also been forced to admit
that their projected deficit is reliant
upon manufactured assumptions which
have now fallen apart.
But USS is still persisting with their
campaign against our pensions.
They retain their demand to
end the collective defined benefit
(Career Average) scheme so they can
replace it with an individual “defined
contribution” scheme.
An artificial deficit
USS’s artificial deficit model assumes
that interest rates will not rise for at
least the next ten years. Yet last week
they rose by 0.25%, and thereby wiped
out over half of the manufactured £5bn
deficit! A 0.1% rise in interest rates
reduces the projected deficit by £1.2bn.
The manufactured deficit also relies
on an assumption that returns on
assets held in the scheme will generate
negative real returns (CPI-0.53%) over
the next ten years.
With stock markets rising further
last week following the interest rate
rise, the scheme assets rose in value
and the scheme is now in all probability
in line for a projected surplus, even
on USS’s reckless Technical Provision
assumptions!
All of this is to simply state what we
have known all along. In any meaningful
sense the scheme has always been strong
and in surplus.
USS have been forced to admit that
even in their pessimistic terms, a rate
of return of just CPI+1.3% means the
scheme breaks even. Yet they continue
to ignore the fact that the scheme has
never had such a low rate of return in its
entire history.
A neo-liberal raid
This manufacturing of deficits continues
despite the facts. The reason is simple.
The Conservative government, USS and
our employers want to destroy collective
pension provision.
This attack is part of a broader neo-
liberal political raid on collective Defined
Benefit pension schemes.
Indeed, the May government is
explicit in its aim of destroying Defined
Benefit pensions and making it easier for
employers to change their commitments
to pensioners.
The senior DWP official responsible
for pensions, Charlotte Clark,
acknowledged only this week that,
with resistance to destroying pensions
growing, ‘this is probably our last chance
to make changes to the DB sector’.1
Make no mistake: we are in a fight
with the Government to defend our
pensions. This is a fight we can win.
The Tory Government is lurching
from one crisis to the next and it could
collapse at any time.
The marketisation and privatisation of
Higher Education is also at risk if student
fees are scrapped in England and Wales
by an incoming Labour administration.
Casualisation, gender and other
pay inequalities and the ever growing
demand by universities to generate ever
larger surpluses can be stopped in the
process.
1 IPE, (2017), https://www.ipe.com/countries/uk/last-chance-
to-change-uk-db-sector-says-dwp/10021168.article?
UCU has a major role to play in this. We
need to fight to defend our pensions,
and in doing so raise the demand that
Higher Education should be free for all,
publicly funded and accountable.
Students should no longer be seen as
cash cows and staff should be rewarded
with decent pay and conditions - and
our pensions protected.
Members are angry that their long-
term commitment to Higher Education
is being destroyed before their eyes, and
– to add injury to insult – their pensions
being taken away from them.
The employers and USS will put
forward their proposals to close, or
virtually close, the collective scheme
from 13 November.
USS spokespeople will present
their reasons as if they were a logical
eventuality deriving from internal
problems of the scheme.
But these ‘reasons’ are a masquerade
for a conscious, orchestrated, political
raid on our pension.
In this situation, actuarial arguments
and evidence are not enough. We have
to take action against the political attack
on our pensions, and make common
cause with our colleagues and students
in order to do so.
We have to cut through the lies and
organise the resistance.
We now have to begin the process of
balloting to ensure escalating industrial
action in the New Year, leading to strike
action, marking boycotts, and whatever
means are necessary to defend our
pensions.
UCU Left meeting today:
‘Organising to defend USS’
In Seminar Room 5
At 3pm, or straight after
conference