University and College Union (UCU) has called on the Universities Superannuation Scheme (USS) to pause the 2020 valuation process until a resolution can be agreed or there has been an application to the High Court to review the USS’s decisions.

In a letter to USS chief executive, Bill Galvin, UCU general secretary, Jo Grady, raised concerns that the USS may have breached its own rules in a way that materially impacted the ability of employers and members to negotiate an acceptable outcome.

The concerns were based on legal advice provided to UCU, which suggested that there were “serious grounds” for questioning the rationality and reasonableness of the decision-making in relation to the 2020 valuation.

“The consequential changes in the scheme that are currently proposed are particularly momentous and, in counsel’s view, there can be no doubt that they justify an application to the court for directions,” the letter stated.

In particular, UCU argued that USS failed to provide a formal determination on actuarial advice and following an actuarial investigation, that an increase in the aggregate contribution rate is required.

It also pointed out that the scheme provided three different potential increases to the aggregate contribution rate, rather than a single figure.

The union said that this was “more than just a technicality, based on a semantic analysis of the rule, because of its impact on the Joint Negotiating Committee decision-making process”.

“It means, for instance, that if the UCU sides works up a proposal on one basis, Universities UK (UUK) can effectively veto it by withdrawing covenant support," the letter explained.

"That would in our view undermine the entire joint decision-making process and would be contrary to the spirit as well as the letter of the rules."

In light of the concerns, the union has asked USS to pause the 2020 valuation process and not to complete it until it can agree a resolution or there has been an application to the High Court to review USS's decisions and any breach of rules has been remedied.

"We are committed to pursuing this argument as far as possible," Grady said in an update to union members. "The outcome could give our negotiators more time to reach an acceptable agreement with employers and it could result in a better resolution to the 2020 valuation, but there are no guarantees at this stage."

In the member update, Grady also urged members to support upcoming ballots on potential strike action, which was announced after UUK's proposed changes to USS progressed to the member consultation stage.

Commenting in response to the letter, a USS spokesperson said: “We have received a letter from UCU suggesting the trustee elects to apply to the court for directions in relation to the 2020 valuation.

“The letter appears to contain some fundamental misunderstandings by UCU of the relevant documentation and we will be seeking a meeting with them to clarify and discuss the points raised.”

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