UCU accepts end to final salary scheme but row over alternative rumbles on

The first sign of a potential thaw in the dispute over pre-1992 university pensions has emerged after the University and College Union put forward proposals accepting the end of the final salary scheme.

The union described its offer as a “sensible and sustainable alternative” to those put forward by employers, who promised to “consider seriously” the details, but experts remain sceptical about whether the two sides are significantly closer to agreement.

Tensions remained high as union negotiators were expected to meet with Universities UK representatives on 13 November, with branch members at the University of Liverpool voting in favour of striking until management rescind their decision to dock 100 per cent of the pay of employees taking part in a marking boycott. As Times Higher Education went to press, union members at Liverpool were awaiting authorisation from the national office before giving official notice of strike action.

Liverpool is among at least eight institutions that have announced plans to deduct full pay over the boycott, which started on 6 November. Some institutions have chosen not to dock pay at this stage, while others have chosen to deduct 20 or 25 per cent.

The boycott was triggered by the proposal to move higher education staff who pay into the Universities Superannuation Scheme’s final salary scheme on to the career revalued benefits scheme that was introduced for new entrants in 2011. This triggered warnings from the union that staff could receive up to a third less from their pensions.

The UCU accepts a move to a career revalued scheme and says it is also prepared to negotiate around a possible increase in employee contributions, perhaps up to 9 per cent.

However, the UCU wants scheme members to continue to receive specified monthly benefits after retirement under a “defined benefit” plan, and for these benefits to be more generous than they are under the existing career revalued scheme.

Employers, in contrast, want to specify benefits only on payments made on salary up to £50,000.

Payments made on salary above that level would be on a “defined contribution” basis, under which actual benefits are dependent on investment returns.

While employers have proposed a 2 per cent rise in their contributions, taking them to 18 per cent, the UCU wants them to go higher, to 20.9 or even 22.4 per cent.

Pensions consultant John Ralfe, a former head of corporate finance at Boots, said the benefits for members would be “at least 15 per cent more generous” under the UCU offer. “They are not even playing the same game,” said Mr Ralfe.

But Sally Hunt, the UCU general secretary, said the scheme had to remain “affordable and attractive to members”.

“It’s in everyone’s interests to reach an agreement as soon as possible, but it’s now up to the employers to address the serious concerns we have raised,” she said.

A UUK spokesman said an “intense” series of meetings would now be held. “We are committed to seeking a joint proposal for reform that offers an affordable, attractive and sustainable pension scheme, for both current and future members,” he said.

chris.havergal@tesglobal.com