Why are a lot of professors going on strike? Or rather, on a marking boycott? The answer ought to worry anyone who is a member of a pension scheme, of any kind, in the UK.
To start with, we’ve got the USS, the pension fund for the universities as they were before 1992. All the other schools, the ex-polytechnics, are part of the Teachers’ Pension Scheme. Unfortunately you’ll just have to deal with the implicit snobbery. That said, the TPS has managed to look after its members better. We’ve also got UUK, Universities UK, the lobby for higher education in Britain, which is also acting as the representative of the management side. And of course we have the UCU, the biggest trade union in the sector, which represents the workers.
The USS has been one of the best pension funds in the UK for decades – don’t trust me, ask Dan Davies, who used to be its broker. Of course, people live longer, and gilt rates suck, and management doesn’t want to contribute more. In 2011, the final-salary fund was closed to new entrants, who instead joined a career-average version of the fund.
The distinction is especially important for academics. The typical career path is anything other than a linear progression through the ranks. Instead, many of them join late, spend years as underpaid graduate students, and with luck, rise as professors after their fifties. Like a trade, a long apprenticeship is required. The final salary system has the advantage that it respects the nature of the trade.
As with any system that requires a nice steady march through life, the career-average system values every pound contributed by a woman rather less, as she is more likely to join late or take a career break. The same goes for people who started as mature students, who are overwhelmingly working-class and more likely to be black than any other group of academics.
Since 2011, new entrants go into the career-average group. This happened because, like all pension schemes, USS needed more money. Now, though, USS wants to change the rules again.
If you were in before 2011, you’ve been told by the Employers’ Pensions Forum, roughly the UUK plus some USS people, that the money you put in isn’t there any more. More exactly, USS now says that the pension based on your final salary is only good up to a salary of £40,000, or perhaps £50,000. (They’ve since decided that it’s £50k, but I’ve kept this to reflect the vagueness around so much of these proposals.) If you have any entitlement beyond that, it gets revalued only by the consumer price index, the one that doesn’t include food, fuel, or housing. Your future contributions, which are of course very much welcome, will go into a new money-purchase fund. Employer contributions to same are of course going to be much less.
Let’s get this clear: USS members already paid for this stuff. They paid in the money, in exchange for a percentage of their final salary. USS and UUK propose to stick to the money, without going through any of the pain that society usually expects of people who refuse to pay their bills. If this goes through, as far as I can see, any fund can do something similar and just take your money.
USS can’t or won’t say if the cap is £40k or £50k. They can’t or won’t say who will run this new money purchase fund, or if you can choose who manages it. They can’t or won’t say what the level of the deficit in the fund is, just that it’s very terrible and the crisis demands action now. They can’twon’t – surely a useful new word – say how they valued it without being able to say what the number is.
They can’twon’t say what happens to members who paid more money into the fund as additional voluntary contributions (AVCs) or added years. What has happened to the money? They can’twon’t say how it happened that “longevity” managed to take them by surprise between 2011 and 2014. Do they get the newspapers? They can’twon’t say why it would be so great to sell the investments that did well, and buy more of the ones that were shit. Actually I know that one: it’s the rules. Dennis Leach at Warwick has a fine blog making the point.
One thing they canwill: bullying and bullshitting. A whole string of schools immediately threatened to sue individual strikers and to refuse to pay anyone who took part in the marking boycott, no matter what else they did. They were probably using helpful free union-busting advice from Pinsent Masons.
However, scratch a bully and you’ll find a coward. After this protest by York University, we get this climbdown.
And the universities do not seem to be adequately represented by UUK. Here is Warwick‘s response. Here’s Oxford’s. Here’s Cambridge’s. None of them seem convinced or happy.
In fact, the impression I get is that UUK are freelancing, or setting out a deliberately extreme negotiating position. So the UCU has every right to show them some teeth. Which makes it even more of a pity that you need to go to Mike Otsuka’s facebook page for anything like useful information, or responsive news. Treat this as an open thread on the strike.
And here’s a song.
All very correct, just to clarify though – pension funds, unlike companies, don’t have house brokers. I was one of dozens of people who broked to USS, although I always got on with them very well. But they are a really good fund – a surprising number of alumni have gone on to quite big hedge funds.