University and College Union (UCU) has submitted a new set of Universities Superannuation Scheme (USS) reform proposals, with the aim of averting potential industrial action in February and beyond.

The union has written to the chair of the USS Joint Negotiating Committee (JNC), outlining the proposals to be formally tabled and put to a vote of employer and staff representatives when the committee meets next month (February).

Its proposals set out in the letter were that Universities UK (UUK) calls on USS to issue a “moderately prudent, evidence-based valuation", of the financial health of the scheme, as at 31 March 2022, to be issued for consultation in June.

UCU called for employers to agree to provide the same level of covenant support as set out in their own proposals to facilitate a cost-sharing of current benefits throughout the 2022/23 scheme year.

This would start on 1 April 2022 with a contribution rate of 11 per cent for members and 23.7 per cent for employers until 1 October 2022, and would then increase to 11.8 per cent for members and 25.2 per cent for employers until 31 March 2023.

UCU then proposed that employers agree to pay a maximum contribution rate of 25.2 per cent and members pay a maximum of 9.8 per cent from 1 April 2023 “so as to secure current benefits or, if not possible, the best achievable as a result of the call on USS to issue a moderately prudent, evidence-based valuation”.

The union said the proposals offered a “way out” of industrial action in February, with 44 of the 68 USS branches having a mandate for action, and would see retirement benefits protected ahead of the new valuation.

UCU said it understood that a “significant majority” had voted in favour of increasing contributions for members and employers to protect benefits in the USS consultation of scheme members, which closed on 17 January, and called on USS chief executive Bill Galvin to publish the full results “as a matter of urgency”.

UUK had previously proposed contribution rates of 21.1 per cent for employers and 9.6 per cent for members, while reducing the salary cap from £60,000 a year to £40,000 a year, capping indexation at 2.5 per cent a year, and reducing members' pension accrual rates from 1/75th of salary to 1/85th of salary.

Commenting on UCU’s proposals, UCU general secretary, Jo Grady, said: “These are serious proposals that would see both employers and employees pay slightly more to protect retirement benefits and allow for a new evidence-based valuation of the pension scheme to be conducted. Employers can stop this dispute at any time and have been offered a route out which protects pensions and averts widespread disruption on university campuses.

“Employers have maintained they need to make a 35 per cent cut to the guaranteed retirement income of scheme members, but that is based on a flawed valuation conducted in March 2020 whilst markets were crashing. The pension scheme’s assets have since jumped by more than £25bn to over £92bn, an unprecedented level meaning employers’ justification for the cuts has now evaporated.

“If employers are serious about stopping UK wide strike action in February, they need to agree to seriously consider UCU’s proposals at the next meeting of negotiators. The university sector continues to show strong growth and university bosses can afford to meet our proposals. If they refuse to do so, they are choosing to force staff to walk out.”

In response, a UUK spokesperson said: “UCU’s suggestion that employers pay 23.7 per cent of salary from April – an increase of 2.3 per cent and over £200m more a year – rising to 25.2 per cent next year, is far beyond the mandate employers have given UUK.

"No employer has agreed to pay such high costs because of the damaging impact on teaching, research, the student experience, and jobs. The increase in member contributions, from 9.8 per cent to 11 per cent of salary, and then 11.8 per cent of salary next year, will make the scheme unaffordable for many staff, and undoubtedly increase the already high drop-out rate among the lower-paid.

“The union’s proposal does not appear to be a serious attempt to reach agreement as it doesn’t reflect the views employers have expressed in consultations. Employers will also question why the proposal has arrived so late in the valuation cycle – especially since industrial action has already been taken – and will be keen to understand why it differs significantly from that previously briefed to the media by UCU, which proposed benefit reforms to tackle the scheme’s increased costs.

“We look forward to a formal discussion through the JNC about both the UCU and UUK proposals with the hope that an affordable solution can be found.”

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