USS Pensions

[Maybeleavey]

Long, slightly confusing emails from the University and UCU arrived today.

Coincidentally, I have a non-academic job offer rumbling in the background, one with slightly shorter working hours and an excellent pension. I was thinking of sticking with academia because I'm quite enjoying it, and have research leave due.

This piece of news is just chipping away at my embryonic decision. How bad is the USS pension likely to go? I'm confused because it's so hard to tell what will happen in future.

I deleted the blasted email - life is rather tough at the moment, I feel like the job is partly killing me, so seeing UCU email in my mailbox... I ducked :(

I just read the email. Not welcome news for a Friday night! I'm a non -academic member of staff (so perhaps not welcome on this board) but a uss (and ucu) member. This is the third downgrading of our pension in the past 6 years! I've never taken industrial action before (I was prepared to last time over the pension, but all that really happened was an assessment boycott which I was ineligible to take part in), I will probably vote "yes" in the ballot, but may not have the capacity for the months of industrial action that Sally hunt is talking about.

Could anyone explain a bit more clearly what the change in the pension is about? I didn't quite understand it from the UCU email, but it sounded concerning.

Basically at the moment we're all in a career average scheme unless you earn over 55k (if you joined before 2011 you also have the final salary scheme protected up until 2015). That means that your retirement amount (the payment per year - which increases per with inflation, the lump sum and death in service and dependents pension) are determined by your average salary - you can look on the uss website for the details and the calculation. The proposal is for this link with salary to be broken and your pension value will purely be based on your contributions, your employers contributions and investment performance - which hasn't been too stellar - which is part of the reason the scheme is in this mess. Pension entitlement built up under the final salary or career average scheme will be protected, but the pension benefits will be reduced for most members going forward. It's a major major change for the worse.

That sounds really depressing

Aren't our contributions based on salary too though (since it's a percentage)?

Or are you saying it used to be a fairly fixed/"safe" amount whereas now it will be more variable and hence up in the air?

Could it end up being too little to live on in retirement?

Crazy that they could just decide to implement such a change for the worse

Yeah, the pension is one of the big perks of an academic post (even if you don't have tenure). Not so much now I guess.

Yes contributions are based on salary (currently 8%) but the payout depends on your salary amount in your career overall not on how much you and your employer have paid in and how the investments have performed which is what the new proposal is.

It is likely that payouts will be less under these proposals and certainly much less sure as you're basically at the mercy of the stock market.

The pension is a major perk of any post in a university not just academic (I'm non -academic) although of course early career academics tend to be in more precarious employment and this change will hit them hard.

Thanks for the explanation Mary!

It does sound incredibly irresponsible to make something like a pension dependent on the stock market!!

I avoided it too and have a head in the sand approach with pensions. Really stupid as I am v good with all other money stuff. Our uni pensions people are beyond unhelpful sadly. Thanks for the explanation.

I am probably very naive, but is it legal to try to implement such a radical change to terms and conditions? Can USS just do this without the agreement of contributors?

Yes it's very much legal and they've done it before (as have many other pension schemes). Everything that you've built up under the previous incarnations of the scheme (final salary up until 2011, career average from 2015 up until the scheme change is imposed) is protected by law and the benefits will pay out on retirement or death in service. They can't make retrospective changes. But what they can very much do is change the rules for future contributions. There will indeed be a "consultation" period, but based on history, what uuk propose pretty much ends up being what is imposed.

Can't your institution decide which scheme you're in? I'm just about to start my first lecturing post and contract says pension will be in the Teachers pension scheme. Which i'm glad about after reading this.

In the nhs previously and our pension were moved from defined benefit final salary to a career average defined contribution scheme. Everyone argued but it went ahead.

Tps is (generally) for post 1992 institutions and USS is (generally) for pre 1992 institutions. You are part of the scheme of which your institution is a member - you don't get to choose.

I did reluctantly accept that in today's climate with longer life expectancy that a final salary scheme is probably unaffordable, especially as there are no private companies offering final salary schemes to new employees. But we've only been in the career average scheme for 2 years and now they want to jettison the whole defined benefit scheme wholesale!

So they're proposing a switch from defined benefit to defined contribution then?

Yes.

www.universitiesuk.ac.uk/news/Pages/Employers-propose-reforms-to-ensure-pension-scheme-remains-sustainable-and-attractive.aspx

I'm just feeling very chastened. The other pension is very good but its final salary scheme closed to new entrants in 2015, so it's defined benefits. It will be hard to judge how much better it will be.

I find the USS communications fairly impenetrable and my AVCs (halted for the moment while I pay childcare fees) aren't going up in value. I just have a creeping sense that year on year I'm worse off, and I should jump before I'm too old to be employable elsewhere. There should be a better way of managing this kind of risk rather than pushing it all onto us.

Both DH and I are in the sector and last time there was industrial action it was... a lean month, to say the least. Looks like there's fun & games to come.