Des Freedman, Brian Alleyne and Tom Henri on why staff at 69 universities have started a marking boycott to protest against proposed changes to pensions

UCU members in 69 universities across the UK are currently taking part in industrial action in opposition to proposals to terminate their final salary pension scheme (USS) and move to a hugely inferior defined contribution scheme. On a turnout of 45%, the highest in the union’s history, 78% supported strike action with a whopping 87% backing action short of a strike including a full boycott of student assessment that is now ongoing.

As the article below shows, the attack on the USS pension scheme is neither justified nor legitimate. While the employers point to an overall deficit – whereby liabilities exceed assets – UCU activists point out that this figure is incredibly volatile and misses out the fact that the scheme has, in recent years, actually made consistent year-on-year profits. Together with the buoyant surpluses (fuelled by the introduction of tuition fees) and the healthy reserves of the university sector as a whole, no wonder that UCU members are cynical about the employers’ motives and determined to resist their attempts further to ‘de-risk’ USS pensions.

Meanwhile, a series of universities, including York, UEA, Surrey and most recently Liverpool have threatened to withhold 100% of wages of those taking part in the assessment boycott – in effect locking them out. UCU policy is to call national strike action in response to this kind of bullying and yet it now appears that national negotiators are prevaricating on this commitment, seeing it as a last resort instead of using it as a way of forcing employers to withdraw these threats before they spread.

Just as worrying is the idea that the final salary scheme is up for grabs and that negotiators may be prepared to abandon final salary in return for an improved career average scheme. This is hardly the way to motivate members who voted for action in the belief that they were defending their existing scheme and it is completely counter-productive to offer up a compromise before the dispute gets going.

The best response to bullying employers and bumbling negotiators is to build the action as far as possible: to win support for the assessment boycott from students who have no interest in universities trampling on the established rights of lecturers and administrators and undermining their own future; to escalate the action to include other measures including boycotts of the admissions process; to press for solidarity strike action with those members who are locked out for taking part in official industrial action; to support those hourly-paid and fixed-term contract staff who may be especially vulnerable as a result of the boycott; and to involve as many staff and students as possible in action that challenges the idea that universities have to act like outposts of the City of London obsessed with lowering costs, maximising surpluses and minimising ‘risk’. Only collective action can deliver this and surely this is what unions are for.

The real reasons for the attack on pensions

Brian Alleyne and Tom Henri (Goldsmiths, University of London)

Our longevity and lack of mortality are the reasons our pensions need reform, we are told.  As we are all living longer, we are drawing pensions for longer. This is one of the main reasons why our current USS final salary pension scheme is allegedly ‘unsustainable’. But what is the basis for this claim? The assumptions on which the proposed reforms are based have been called into question. A key point raised by several mathematicians and statisticians in a recent letter to Times Higher Education was that: ’The predicted salary increases assume a buoyant economy while investment returns assume a recession’. Why would the proposals put to us be based on two divergent economic assumptions? One answer is that these divergent assumptions taken together best support the case for reducing pension benefits.

Economic prediction is notoriously difficult, but actuarial science has more than a century of results to its credit. In order for us to accept these proposals, there should be overwhelming actuarial evidence in support. Universities UK have not shown us why their preferred scenario is the one we should follow in deciding how to make our pension scheme fit for the future. USS members need more information and more modelling tools, as indeed was pointed out in the letter referred to above, as many questions remain, some of which we set out below.

What would our pensions look like if we assumed a buoyant economy on both the growth and investment returns side – using 1.5% growth as an average figure over the next 20 years (a conservative figure for the trend growth rate of the UK economy)? And what would the scenario be for flat growth over the same period? Given increased demands on the fund due to members living longer, then could any supposed shortfall be made up without reducing the benefits of members? Our contributions into this fund represent years of foregone earnings on the assumption of a certain level of benefit: will we get refunds or credits of some kind if the employers’ proposals go through? Why is one of the largest independent pension schemes in the UK being targeted in this way, on debatable assumptions for the future? This proposal to end our final salary scheme is yet another indication of the shift away from mutualisation/collective provision and toward financialisation/individualisation.

If French economist Thomas Piketty is correct that the long run trend in advanced capitalist societies is for the rate of return on capital to exceed the growth rate of GDP, then this should be true for the UK, and if so one might ask if the average rate of return on even a conservatively managed fund, such as the USS scheme as it now stands, is not likely to increase going forward? Unless we enter into Japanese-type deflation, then it would seem likely that the USS fund should continue to generate respectable returns, and that with periodic reviews of the levels of contributions, the final salary elements could be retained, even as those of us still in work are likely to live longer and to contribute for longer, given the upward creep of the age of retirement.

It is not because our pension scheme is weak or fundamentally flawed that we are being faced with these proposals. It is because it is strong and independent and is an example of the sort of collective provision that is loathed by neoliberalism. We know that academics as a group are not viewed with warmth by key parts of the establishment, as evidenced by repeated and largely successful efforts to discipline and punish academics by measures that worsen working conditions and increase surveillance and attempt to turn our students into consumers of educational commodities. In an environment where the government serves the needs of big business interests in the main, universities are often inconvenient sites of criticism of the neoliberal state. This attempt to weaken our pension scheme is the latest in a long line of projects aimed at making sure that no group of wage or salary earners enjoys any form of economic security that is not subject to the dictates of capital.

This is an unjust proposal and we must resist it.