Pension plans would cost staff ‘tens of thousands’, says union

The warning from the University and College Union about changes to the Universities Superannuation Scheme, affecting academics and some other staff at pre-1992 institutions, comes after modelling by First Actuarial for the union.

Modelling for Times Higher Education had already showed that staff would see up to £20,000 a year wiped off their pensions.

UCU is balloting members in 67 universities for industrial action to oppose the changes to the USS. The ballot opens on 1 October and closes on 20 October.

The union will be asking members to back plans for a marking boycott and to refuse to set exams.

The UCU’s modelling looked at potential losses for different types of staff. The biggest loser was a professor, aged 40, who joined the scheme at 25 and retires at 66 on a salary of £75,000.

Their current pension of £46,050 a year would see £12,446 a year wiped off under the changes, according to the UCU’s modelling. That amounts to a per cent cut and a lifetime loss of £230,251, assuming life expectancy of 84.5 years.

The next biggest loser in cash terms was a senior lecturer, aged 40, who joined the scheme at 25 and retires at 68 on a salary of £54,841. They would see their £39,657 a year pension cut by £7,341 a year, or 18.5 per cent, equating to a lifetime loss of £121,1, according to the UCU’s modelling.

As THE has reported, UUK explains in a consultation document now circulating in universities that it would seek to replace the current final salary and career revalued benefits (career average) schemes with a more affordable “hybrid” that is “targeted on scheme members with the lowest incomes”.

In this scheme, some 150,000 higher education staff who currently pay into USS would instead contribute towards the new scheme to help the USS close its estimated £7 billion funding gap.

But the UCU says that “the methodology used to determine the deficit is too simplistic and doesn’t take account of the scheme’s underlying strengths”.

UUK has said that it is in discussions with UCU, with whom it forms the USS Joint Negotiating Committee, which will publish its plans for wider consultation early next year.

john.morgan@tesglobal.com