Glasgow prepared to pay more to avert further USS pension strikes

A leading institution has indicated its willingness to increase its contributions to the Universities Superannuation Scheme in what it described as a “future exit strategy” from the long-running dispute over the UK sector’s biggest pension fund.

University and College Union branches on 27 campuses have a mandate for continuing strike action over cuts to benefits provided by USS pensions, which will cost members thousands of pounds annually in retirement.

But in a joint statement with its UCU branch, the University of Glasgow said that it was prepared to increase its level of employer contributions – a key sticking point in the dispute, because the cut to benefits was driven by institutions’ desire to avoid “unaffordable” increases in payments beyond the current level of 21.6 per cent of salaries.

“While recognising contribution levels are currently at the limit of affordability for many employers and employees, [Universities UK should] consider whether in a future valuation a further uplift in employer contribution may be possible depending on the financial health of the sector,” the statement said.

“We recognise that during the current valuation cycle the University of Glasgow has supported a maximum affordable contribution rate of up to 23.7 per cent.”

The statement added that “any upside arising from the next scheduled valuation of the scheme’s assets and liabilities should be used to improve member benefits and not to reduce employer or employee contribution rates from current levels”.

Glasgow and its UCU branch described the statement, which called on the USS board to undertake the next valuation exercise “on the basis of a reasonably prudent approach”, as “a future exit strategy from the current USS dispute”.

As well as being home to one of Scotland’s largest UCU branches, Glasgow’s principal, Sir Anton Muscatelli, is a leading economist who is a UUK-appointed member of the USS board.

The intervention came as UCU branch representatives voted on next steps in the industrial dispute following the decision by some branches to continue industrial action.

The union balloted 65 branches on more strikes, but – while all voted in favour this, with the overall “yes” vote standing at 79.5 per cent – only 24 passed the 50 per cent turnout threshold that is legally required for a walkout. A further three already had continuing mandates.

This has been seen as a sign of fatigue among union members after 13 days of strike action this year in a dispute that stretches back several more years, alongside a separate row over pay and working conditions.

Michael Otsuka, professor of philosophy at the London School of Economics and an expert on the USS dispute, described Glasgow’s statement as a “breakthrough”, since universities’ refusal to increase their contributions “was the most significant sticking point in previous negotiations”.

Writing on Twitter, Professor Otsuka noted that “the increase in employer contributions is not conditioned upon an increase in member contributions”, which “marks a departure from past [employer] insistence that the 65:35 cost-sharing formula apply to any contribution increases”.

In its most recent statement on USS contributions, UUK said that employers “have repeatedly made clear that current contributions are at the very limit of affordability”.

chris.havergal@timeshighereducation.com