Strike action at 65 of Britain’s top universities over the summer exam period has been averted after the University and College Union (UCU) voted to accept a pension deal.
The UCU, which represents more than 110,000 lecturers, librarians and other university staff, said its members had voted to allow an expert panel to review a controversial valuation of the £60bn Universities Superannuation Scheme, which identified a £6.1bn funding hole.
Union members began strike action in February, and 14 days of teaching have been lost this year, after Universities UK (UUK), the umbrella group for the institutions, threatened to end their defined-benefit pensions, which promise a guaranteed retirement income, because the cost of providing these benefits is rising.
Universities UK has since dropped plans to move staff to defined-contribution schemes and its latest offer proposed a panel of actuarial and academic experts jointly appointed by the union to look at the valuation of the pension fund and make recommendations.
The union had argued that moving to a defined-contribution scheme would mean a loss of around £10,000 a year in retirement income for a typical lecturer.
UUK has also agreed to discuss a wider range of issues raised by the union, including comparisons with the Teachers’ Pension Scheme and the role of government in providing support for USS.
While the review takes place, current pension arrangements for members will remain in place until at least April 2019.
Nearly two-thirds, or 64 per cent of the 63.5 per cent of union members who took part in the ballot, voted to accept the offer. The UCU said the ballot result meant a fresh wave of strikes at 65 universities, planned to roll out from next week, would be suspended.
“Members have participated in record numbers in the consultation, with a clear majority voting to accept the proposals,” said Sally Hunt, general secretary of the UCU.
“Now we have agreement to move forward jointly, looking again at the USS valuation alongside a commitment from the employers to a guaranteed, defined benefit scheme. USS, the regulator and government now need to ensure that UCU and Universities UK have the space to implement the agreement effectively.”
The UCU said it would keep its strike mandate live “as a precaution” until the review is finished.
Universities UK said students now had an important reassurance that they won’t be affected by further disruption during their summer study and exam period.
“Reviewing the methodology and assumptions in the current valuation will build confidence, trust and increase transparency in the valuation process,” said a UUK spokesperson.
“It will provide an opportunity to consider the questions raised about the valuation by scheme members and employers. It is important that interested parties engage with the panel and remain open-minded about its possible findings.”
The dispute centred on a 2017 triennial valuation of the giant USS fund, where the scheme’s trustee estimated the cost of keeping pension benefits in their current shape had risen by a third since 2014, meaning contributions from both employers and scheme members would have to rise, benefits be watered down or a combination of both.
UUK warned that teaching budgets might have to be raided if it was forced to increase its pension contributions from the current 18 per cent of employee’s salary.
Last month, the USS defended the robustness of the controversial valuation, saying it had already taken substantial independent advice from different professional firms at each stage.
“The trustee has full confidence that the valuation provides a solid basis for moving forward, and will do that absent any new evidence,” said the USS.
“The trustee must complete a valuation, whether the expert panel makes any new suggestions or not.”
Under a statutory deadline, the USS valuation must be submitted to the Pensions Regulator by June 30.
UUK said, alongside UCU, it would seek support for the review process from USS and the Pensions Regulator “fully recognising their statutory responsibilities and accountabilities”.