LONDON (Bywire News) - Members of the trade union currently striking across UK universities are taking the pension fund at the centre of the dispute to court. It’s over the controversial decision to downgrade the value of members’ pensions. And the action comes as tens of thousands of university staff are still on strike across the UK.
As Bywire News previously reported, the University and College Union (UCU) has been engaged in industrial action against employer representative body Universities UK (UUK). Overall, staff have been striking at 68 universities for weeks, with the dispute affecting one million students. Staff started another three days of action on Monday 28 February
UCU’s action focuses on overpay, conditions and pensions:
- Universities have cut staff pay by over 25% in real terms since 2009.
- Half of the staff are “showing probable signs of depression”.
- Employers are giving staff “exploitative and insecure contracts”.
Its general secretary Jo Grady said:
“This continued industrial action will hit 63 universities and the responsibility of vice-chancellors who have done nothing to address falling pay, pay inequality, the rampant use of insecure contracts and unmanageable workloads”.
But university bosses are also planning to make a cut of 35% to people’s pensions.
The Universities Superannuation Scheme (USS) is the UK’s largest private pension scheme. It manages assets, stocks and investments to give members a pension when they retire. But as Bywire News previously reported, USS bosses are cutting members’ pensions. This is partly because pension bosses devalued the fund at the start of the coronavirus pandemic. They decided that the fund’s deficit was £14.1bn.
Clearly, the USS valuing pensions investments in the midst of a global crisis seemed foolish, at best. And at worst, it seemed like pensions managers were intentionally trying to devalue the scheme. Because fast-forward to February 2022 and the USS deficit had shrunk to £2.9bn – a fall of nearly 80%. But some university staff are taking further action.
A group of UCU members are taking the USS to court. They’re claiming that the fund has acted unlawfully in four areas:
“(1) failure to act within their powers and negligence, in maintaining the 30 March 2020 Covid-crash valuation date for predicted pension assets, and in assuming 0.0% asset growth above inflation for 30 years, even though the fund grew from £66.5bn to £85.3bn by June 2021;
(2) self-serving negligence, by inflating internal asset manager personnel costs by 1318% since 2008, and tripling external adviser costs, and inflating embedded fund manager costs, but proposing to cut beneficiaries' pensions (not USS costs) to respond to the so-called "deficit";
(3) discrimination, by proposing to cut the defined benefit pension, or raise contributions, and ignoring the disproportionately negative gender and other equality impacts;
(4) negligence and failure to act in beneficiaries' best interests, by not divesting from fossil fuels, even though these are causing significant financial detriment…”
The group crowdfunded nearly £60,000 for the case. But it hit a snag when previously, a court agreed with the USS that the case had “no merit”. So, the group took the decision to the High Court. And on 28 February it ruled that the application could go ahead.
As the FT’s Josephine Cumbo tweeted: “The academics' application will go forward to a full hearing (in the next few weeks) where the judge will decide whether the application should be given permission to go ahead with the lawsuit."
"It's still early days for the claim,” she added.
She noted that:
“The next stage for the USS High Court action is on March 21 - where both the academics and USS will present their cases to Justice Leech.
The judge will decide whether the #USS claim can then proceed to a full hearing”.
But interestingly, Cumbo also said that:
“The directors of the USS trustee board were meeting today to sign off the controversial 2020 valuation, which will reduce pensions for thousands of active members."
"Questions now over whether the directors can continue to sign off the valuation… [with] legal cloud over its validity”.
So, with strikes at universities ongoing and the USS facing legal action – it appears that UCU is steadfast in its fight for its members. Whether or not university bosses and the pension fund cave into this impressive level of pressure remains to be seen. But it’s clear that the union and its members are doing everything in their power to try and make them.
(Writing by Steve Topple, editing by Klaudia Fior)