University pensions deficit ‘may not be as big as feared’

A group of academics have raised questions as to whether the pensions shortfall which has triggered the university lecturers’ strike is as grave as initially feared. 

Up to 100 academics have accused administrators of the Universities Superannuation Scheme (USS) of taking a worst case scenario when it comes to assessing its performance.

They say that salary increases are likely to be lower and the performance of pension investments are likely to be much better than feared by the trust which administers the pensions, while life expectancy is not expected to be as long as predicted.  

It is estimated that more than 60,000 students have been affected by the strike, which has resulted in the cancellation of lectures and delays in marking

It is estimated that more than 60,000 students have been affected by the strike, which has resulted in the cancellation of lectures and delays in marking

It is estimated that more than 60,000 students have been affected by the strike, which has resulted in the cancellation of lectures and delays in marking

Many students -  such as these demonstrators in Leeds city centre - support striking university workers

Many students -  such as these demonstrators in Leeds city centre - support striking university workers

Many students –  such as these demonstrators in Leeds city centre – support striking university workers

The lecturers say they will escalate the dispute  in the coming weeks if there is no resolution to their grievances

The lecturers say they will escalate the dispute  in the coming weeks if there is no resolution to their grievances

The lecturers say they will escalate the dispute  in the coming weeks if there is no resolution to their grievances

Students at almost every mainstream university could have their final year exams cancelled or disrupted this year because of striking academics

Students at almost every mainstream university could have their final year exams cancelled or disrupted this year because of striking academics

Students at almost every mainstream university could have their final year exams cancelled or disrupted this year because of striking academics

The letter written by the academics means that the strike may be unnecessary as  there is enough money in the kitty adequately to pay pensions. 

About one million students have been affected by the strike, with lecturers not teaching, marking or carrying out research. It is likely that future exam-taking and marking will also be affected. 

The strike comes amid allegations that two of its ringleaders are militant left wingers while the main union leader is paid more than £130,000 a year.

University union boss Sally Hunt has been accused by The Times of taking home home more than £138,000 a year, including a £3,000 car benefit

University union boss Sally Hunt has been accused by The Times of taking home home more than £138,000 a year, including a £3,000 car benefit

University union boss Sally Hunt has been accused by The Times of taking home home more than £138,000 a year, including a £3,000 car benefit

Matt Waddup is accused of playing an instrumental role in the dispute - he is a hardline former Rail, Maritime and Transport union activist who has a history of disruption on the railways and on the campuses

Matt Waddup is accused of playing an instrumental role in the dispute - he is a hardline former Rail, Maritime and Transport union activist who has a history of disruption on the railways and on the campuses

Matt Waddup is accused of playing an instrumental role in the dispute – he is a hardline former Rail, Maritime and Transport union activist who has a history of disruption on the railways and on the campuses

Matt Waddup, who is the campaign chief behind the walkout of 42,000 staff at 64 universities including Cambridge, Oxford, Durham, Bristol and Manchester is alleged to have been planning strikes over lecturers’ pension benefits for seven years, telling academics that industrial action should escalate gradually until ‘real damage is done’.

Waddup is a communist who once pledged to ‘dance on Margaret Thatcher’s grave’, The Times reported. 

Another prominent activist in the dispute is Ed Bailey, deputy head of campaigns at the University and College Union (UCU) who is a communist passionately opposed to badger culling. 

UCU leader Sally Hunt meanwhile is alleged by The Times to earn more than £138,000 a year while at the same time having a record for condemning high salaries. 

In their letter written in the autumn about 50 academics pointed out that the USS manages £60 billion in assets on behalf of its members. 

‘The most recent USS accounts and reports indicate the scheme has a large deficit,’ it states.

Official UCU pickets outside of the UCL main gates and Malet Place in an attempt to keep students from crossing the picket line and to raise awareness of the changes to lecturers' pensions

Official UCU pickets outside of the UCL main gates and Malet Place in an attempt to keep students from crossing the picket line and to raise awareness of the changes to lecturers' pensions

Official UCU pickets outside of the UCL main gates and Malet Place in an attempt to keep students from crossing the picket line and to raise awareness of the changes to lecturers’ pensions

 The academics argue that there may be enough in the kitty to me lecturers' pension requirements

 The academics argue that there may be enough in the kitty to me lecturers' pension requirements

 The academics argue that there may be enough in the kitty to me lecturers’ pension requirements

Members of the UCU are on strike because they say changes to the USS will leave a typical lecturer almost £10,000 a year worse off in retirement

Members of the UCU are on strike because they say changes to the USS will leave a typical lecturer almost £10,000 a year worse off in retirement

Members of the UCU are on strike because they say changes to the USS will leave a typical lecturer almost £10,000 a year worse off in retirement

Younger academics could lose almost half of their total retirement income, the union says

Younger academics could lose almost half of their total retirement income, the union says

Younger academics could lose almost half of their total retirement income, the union says

‘However, the USS provides insufficient information about the methods used to value its assets and liabilities.’

They say that figures which show a fall in long-term investments and statistics that predict steep salary rises alongside increased life expectancy rates – which have not increased since 2011 – could all be questionable.

Steven Haberman, Professor of Actuarial Science at the Cass Business School at the City University of London was one of the signatories of the letter who argues that the points it raised last year remain valid.

‘Some of the assumptions are wrong in relation to a pensions black hole,’ he told Mailonline. ‘It is by no means clear how long people will live in retirement, nor is it necessarily true that salaries will rise by as much as four percent. 

‘We have not seen salary increases over the last 10 years that have been anything like that – they have been no higher than one percent a year.’

Prof Haberman said that figures show that pension investments in stocks, shares and bonds have also performed much better than predicted.

‘The key point to remember is that university pensions are not wholly in the public or the private sectors. But pension regulators tend to panic if they see a fund under-performing in the short-term, when what is needed is a more long-term view,’ he argued. 

‘Britain’s universities are not going to disappear overnight and should not be treated in the same way as outsourcing company Carillion which is here today and gone tomorrow.

‘What is urgently needed is for the government to intervene to relax the regulator’s constraints.’

Meanwhile allegations have emerged that the lecturers are being led by radical left wingers eager to weaponise a dispute that is the worst to affect British universities in modern times.

Critics say that Matt Waddup, the campaign chief who has played an instrumental role in the walkout, is a hardline former Rail, Maritime and Transport union activist who has a history of disruption on the railways and on the campuses. 

In 2008 Waddup encouraged people on Facebook to dance on Margaret Thatcher’s grave. 

Another key figure accused of orchestrating the dispute is Ed Bailey, the deputy head of campaigns at the University and College Union (UCU). He also has a radical reputation, expressing his sympathies for Irish nationalism online while also denouncing ‘Israeli terrorists’.   

The head of the UCU meanwhile has been accused by The Times of taking home home more than £138,000 a year, including a £3,000 car benefit.  It reported that Sally Hunt, 53, the General Secretary of the UCU, receives her substantial salary and benefits despite never being an academic herself. 

The Times also reported that more than 150 UCU staff earn an average of more than £50,000 a year. it said that the union spends about £9.5 million annually – more than half of its expenditure – on staff remuneration and expenses. 

Members of the UCU are on strike because they say changes to the USS will leave a typical lecturer almost £10,000 a year worse off in retirement, they say.

Younger academics could lose almost half of their total retirement income, the union says.

Under the proposed changes, the USS will change from a defined benefit scheme, giving members a guaranteed income in retirement, to a defined contribution scheme, where pensions are subject to changes in the stock market.  

The USS is reported to have one of the largest pensions deficit of any UK pension fund after it increased by £9bn in 2016, with some experts warning that student fees may have to rise or be diverted from teaching.

The USS funds pensions for academics who are mostly based in the pre-1992 universities, and has nearly 400,000 members.

 

 

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