Cutting through the spin on USS #2

This UoN UCU’s response to UoN’s post about USS – UoN text in black, UCU response in red

Reporting latest developments on USS pension, UoN failed to accurately report what happened at JNC and UCU actions. We take this opportunity to rectify information and put some of the statements reported in context.

The Joint Negotiating Committee (JNC) has decided to progress the employers’ proposal for changes to the USS pension scheme to consultation with scheme members and representative bodies.

The decision means that scheme members could avoid significant increases in their contributions, which the USS Trustee has said it would otherwise be required to implement, going up from the current 9.6% to 18.6% of their salary from as soon as April 2022.

USS argued that to keep benefits unchanged, contribution rates need to increase to somewhere between 42% and 57% (cfr. 26% pre-2018 dispute). This is based on a flawed valuation of the scheme in March 2020 (see below) and essentially is a rip off.

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Looking ahead to autumn term 2021-2022. The Delta variant: how to protect staff and students

As we look ahead to the 2021-2022 session, it is clear that the Covid-19 pandemic will still affect our daily lives. The success of the vaccination campaign in the UK notwithstanding, it would be premature to declare the pandemic over. At the moment, there is a lot of discussion about whether government guidelines for Higher Education institutions at the national level are sufficient and about whether the decisions made by Senior Management of The University of Nottingham do enough to keep students and staff safe. One of the key issues here is whether these guidelines and decisions incorporate the latest scientific advice on Covid-19 and, in particular, on the now dominant Delta variant.

The current teaching blueprint at the University of Nottingham seeks to maximise face to face teaching, whilst recommending vaccination, the wearing of face covering indoors and weekly testing. However, these are mere recommendations which means that they cannot be enforced. In addition, staff have been asked to return to campus for face to face teaching.

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Cutting through the spin on USS

Reporting a Russell Group statement of principles for the USS pension scheme (5 July 2021), UoN management referred to:

… UUK alternative proposals to maintain USS as a hybrid Defined Benefit/Defined Contributions scheme with no increases in contributions to the scheme by members, backed up by employers offering further, stronger covenant support measures.

Is this the whole truth? No.

It’s spin.  “Maintain USS … with no increases in contributions … by members” fails to point out that the UUK proposals will lead to a much worse scheme for members.

This is how UUK, supported by management at the University of Nottingham, wants to cut your pension:

  • now, your pension grows by 1/75th of salary for every year you work; UUK proposals would cut this to 1/85th – cutting pensions by 12%
  • now, every pound you earn up to £59,800 adds to the secure defined benefit element of your pension; UUK proposals would cut this threshold to £40,000
  •  now, inflation can’t erode the buying power of your pension unless it exceeds 5%; UUK proposals would cut this protection to 2.5%

To see what impact these proposals will have on your pension, visit the modeller provided by UCU here.

UUK represents the interests of employers in USS negotiations. UCU represents the interests of everyone who is eligible to join USS. UCU opposes these damaging UUK proposals.

UCU Committee message to management on 19 May 2021 re USS:

Dear Vice Chancellor, Chair of Council, Deputy Vice Chancellor and Registrar, 

I am writing on behalf of the local UCU committee to express our grave concern about UoN management’s shift away from questioning USS’s valuation method toward accepting the most recent UUK proposals. We note that, if implemented, the UUK proposals would imply significant cuts to our members’ pensions including the following:  

  1. DB (defined benefits) salary threshold reduced to £40k. Currently we receive DB for income up to about ~£60k. This would bring all but the lowest paid members into the Defined Contribution (DC) scheme, significantly reducing benefits, and constitutes a step in bringing back the DC scheme that industrial action threw out in 2018.
      
  2. Accrual rate reduced to 1/85 (from the current 1/75) cutting the value of future pension by 12%.
      
  3. Reduction in inflation proofing to 2.5%. Currently it is up to 10%. Inflation has been high in the past and could increase again. If inflation does increase, our pensions could be very quickly reduced to only a fraction of their current value. 
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Transparent, participatory financial decision-making? Not at the University of Nottingham!

Following up on our Alternative Financial Strategy, UoN’s UCU committee has approached management to share its new, updated Medium Term Financial Plan (MTFP) with us. This is the document that sets out the University’s financial plans for the medium term, the current plan covers the period until 2025. The MTFP is a tool to implement the University’s Strategy. Management has, however, refused to share the MTFP. We have been told that it would be made available only after it has been approved by the University’s Finance Committee and Council in the summer. That is, the union can only see the Plan after it has been decided and therefore not open to revision or amendment.

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