New staff members at the University of Portsmouth will be prevented from accessing the Teachers’ Pension Scheme (TPS) in what the University and College Union (UCU) has called a plan to create a “two-tier” workforce.
The university wants to employ all new staff through a wholly owned subsidiary company from 1 August and enrol them on an internal defined-contribution scheme instead of the TPS or Local Government Pension Scheme.
UCU described the alternative scheme as “drastically inferior” to the TPS and said it would enter a trade dispute over the issue, with a potential strike ballot to follow.
Management at the university have justified the move by claiming that current pension costs are “unsustainable” after steep hikes in employer contributions for the TPS.
Earlier this year, the then Conservative government increased employer contributions to the scheme, which applies to all post-1992 universities, by five percentage points, which saw them rise from 23.68 per cent in England and Wales to 28.68 per cent.
Portsmouth said that its pension contributions cost the university £26.6 million a year, and that post-92 universities face employer pension costs up to 15 per cent higher than institutions in Russell Group, whose staff are members of the Universities Superannuation Scheme, which “places us in an uncompetitive and financially challenged situation”.
Jo Grady, general secretary of the UCU, said staff members had the union’s “full backing” in any industrial action they might choose to take.
Dr Grady said: “Portsmouth management is trying to tear up nationally agreed terms and conditions in its attempts to create a two-tier workforce. Pensions are deferred pay, and it is completely unacceptable for the university to try to leave industry-standard schemes by the back door.”
While universities have had to pay for the rise in contributions themselves, the government has provided additional funding to schools and colleges to help them cover the increase.
The Universities and Colleges Employers Association and Universities UK have previously asked the government to allow affected universities “greater flexibility”, highlighting that 46 per cent of post-92 institutions had already had to make redundancies since August 2023, and that the increase in contributions was placing more pressure on already stretched budgets.
Dr Grady added: “We have a new government that has said fixing the higher education funding crisis is a day-one priority. To avoid a race to the bottom in terms and conditions, Labour now needs to match the support given to schools and colleges and fund the increase in employer TPS contributions.”
A spokesperson for Portsmouth said: “Pensions are an important and much-valued benefit for staff, and we have worked hard to ensure that new colleagues will be offered a competitive defined-contribution pension.
“This scheme will provide an employer contribution of up to 15 per cent of salary, with a flexible choice of employee contributions to make the scheme affordable for staff and to address the growing number of staff who are opting out of the existing pension schemes due to the high employee costs. The scheme includes free life insurance cover and allows members to add one of a number of flexible benefit options to their scheme.”
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