The University and College Union (UCU) has called on employers in the Universities Superannuation Scheme (USS) to work with local UCU branches to demand a change of approach to the ongoing 2020 valuation of the pension scheme.

The call for action follows recent letters to the USS from both the University of Oxford and the Oxford UCU branch, as well as the University of Cambridge and the Cambridge UCU branch, which highlighted "serious concerns" over the valuation approach.

The union has praised the approach taken by both universities, calling on more employers to work with their local UCU branches to challenge USS’s approach.

In particular, criticisms have been made around the scheme “cherry-picking” recommendations from the Joint Expert Panel, convened by UCU and Universities UK following "unprecedented" pension and pay related strike action, which was paused amid Covid-19 concerns.

Concerns have also previously been raised around the underappreciation of the strength of the employer covenant and potential contribution increases, which UCU has warned are pricing low paid members out of the scheme.

UCU general secretary, Jo Grady, stated: “We have no confidence in the approach USS has taken in valuing university staff pension pots and Oxford and Cambridge universities are right to join with their respective UCU branches in raising the alarm.

“These are two very large institutions with a huge share of the scheme’s liabilities and we expect USS to take their criticisms seriously.

"We also want to see other universities engaging with their UCU branches and demanding improvements to the 2020 valuation before it is too late.

“Even after the biggest wave of strike action in higher education, and the creation of the JEP, USS continues to rely on flawed assumptions that underestimate the strength of the scheme and the higher education sector.

“UCU members are not willing to stump up even more of their wages because the scheme is being undervalued. Universities must join us in pressuring USS to act before more members are forced to drop out or suffer cuts to their benefits in retirement.’

Indeed, individuals have also voiced their concerns, with 3,874 scheme members recently signing a complaint letter to the USS trustee, arguing that there was "little empirical or theoretical justification" for the changes, and that there had been a "consistent failure" to meaningfully address concerns with stakeholders.

In addition to this, USS Employers have previously raised concerns over the "unhelpful" consultation, describing it as "incredibly difficult" to understand, leaving a large number of employers unable to to respond to some questions.

In response, a USS spokesperson said: “We understand members and employers are concerned about the difficult choices facing UCU and UUK.

"The continued fall in interest rates and the worsening outlook for investment returns has made USS’s valuable pension benefits even more expensive to provide.

“We will shortly publish a full update covering current talking points, reflecting recent discussions with the Pensions Regulator, and making clear the decisions facing UUK and UCU – including the cost of continuing to provide the scheme’s current benefits.

“We are committed to engaging with UCU and UUK as we work to achieve the best outcome possible in difficult circumstances.”

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