University boss calls for rethink over USS changes

University boss calls for rethink over USS changes

Proposed changes to the Universities Superannuation Scheme (USS) would have “serious consequences” for affected universities and alternative approaches should be explored, the University of Warwick’s vice-chancellor, Professor Stuart Croft, has warned.

In a blog post to staff, Croft criticised the “conservative approach” adopted by USS, and called for “greater understanding and explanation” of the process by which the valuation has been made.

Advocacy group Universities UK is proposing changes to USS to address deficit issues and a significant rise in the cost of future pensions.

A deficit of approximately £7.5 billion and the cost of funding current benefits has risen by at least 11 percent, prompting calls for a change.

In his blog post, Croft also warned that the “de facto end to the defined benefit scheme will require USS’s investment strategy to become increasingly cautious”, undermining its future growth.

Under Universities UK’s proposed changes, guaranteed pension benefits through a defined benefit scheme would be replaced by a defined contribution scheme.

There are “alternative more attractive schemes in place elsewhere in the sector”, according to Croft, who was referencing the Teachers’ Pension Scheme, which is available in the post-1992 sector. He called for “alternative, more innovative solutions”—including possible government backing for the pension scheme—to be explored in order ensure that USS remains competitive.

The intervention came as the University and College Union (UCU) began to ballot members for industrial action over changes to USS.

The ballot opened today and will close on 19 January 2018.

Responding to Croft’s intervention, UCU general secretary Sally Hunt said: “Professor Croft is right to highlight the hugely damaging impact which ending the defined benefit scheme would have on both universities and their staff. These plans would remove members’ security in retirement and leave them facing years of uncertainty about whether their pensions will be sufficient to live on.”

“This important intervention confirms our belief that the proposals from Universities UK do not have support from across the sector. While divisions in the employer position are beginning to show, UCU is united as we fight to defend our members’ pensions.”

“We all want to avoid widespread disruption on campuses, but universities must be under no illusion that their staff will take industrial action to defend their pensions. I would urge all members to back the action in the ballot.”

Categories: News, UK Pensions

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