Text from the comment piece for Felix

UCU strikes are an unfortunate last resort 

Our lecturers, teachers, administrators, technical staff, and researchers are voting on whether to go on strike 

It really doesn’t have to be this way. Staff members of the University and College Union (UCU) voting on whether to go on strike over huge cuts to pensions. But that’s what is happening, at Imperial, and in universities across the UK. Voting started on 18^th October and runs until Thursday 4^th November. If enough votes are in favour, lecturers, teachers, administrators, technical staff, and researchers will be taking the drastic step of withdrawing their labour and forming picket lines, to pressure university management to stop their severe and unnecessary cuts.

No-one wants to strike. It is always a last resort. Unfortunately, staff are having to consider industrial action due to intransigence by university employers — including Imperial — and their refusal to take an evidence-based approach to the University Superannuation Scheme (USS) pension scheme.

The USS pension scheme  

A Defined Benefit pension scheme like the USS is a form of “deferred pay”: an employee agrees to defer, or put aside, some of their salary now, in return for a guaranteed income — a proportion of their average salary over their career — on retirement. Most academic and academic-related staff in pre-1992 universities in the UK, including Imperial College, are members of the USS. An employee and their employer make contributions into the scheme, which are collectively invested and, when the employee retires, their pension is paid out of collective USS assets. Imperial College — as part of the university employers’ organisation Universities UK (UUK) — wants to slash the benefits to its employees. The UCU estimates that, for example, a 35-year-old lecturer starting work now on spine point 29 at Imperial College is set to lose around 45% of their guaranteed pension income. This can be seen using the UCU modeller for predicting pension benefits: https://www.ucu.org.uk/ussmodeller

What is the dispute over?

Pensions are complicated. But in this case, this time around, UCU believes that the situation is relatively simple.

The main organisations involved in the current dispute are USS itself, UUK (representing employers), UCU (representing working and retired members of USS) and the Government via the Pensions Regulator (tPR). The Regulator requires USS to assess the value its fund every 3 years to decide whether making prudent assumptions about how the fund will behave in the future, it can pay out the pensions that it has guaranteed to pay. The last valuation was in 2018. USS then opted to perform an early valuation, in March 2020, just as the stock market fell due mainly to uncertainties caused by the global coronavirus pandemic. USS’s March 2020 valuation reported a deficit of £15.4bn. UCU and other commentators have criticised this valuation as unscientific and unreliable, as well as being untimely; see, for example: https://medium.com/ussbriefs/how-extreme-prudence-and-misguided-risk-management-sent-the-uss-into-crisis-baf78c35d9e1

However, UCU and its members are on very strong ground: even if one takes this March 2020 headline deficit of £15.4bn, calculated by the flawed USS methodology, at face value, 17 months later on August 31^st 2021, USS assets were valued at £89.6bn which is £23.1bn higher than in March 2020:

https://twitter.com/StevenJulious/status/1451577519346524171?s=20

The prima facie evidence is that USS is now in surplus by many billions. And a more sensible scientific valuation methodology — as recommended by the Joint Expert Panel (JEP) set up after the 2018 strike over USS — would likely show USS now to be in surplus by even more.

The scarcely credible situation now is that Imperial College supports slashing its employees’ pension benefits on the basis of a valuation in 2020 that has been overturned by the events of the last year and a half. It is totally unnecessary. Staff are asking employers to not make the cuts and to work with UCU to make these damaging disputes a thing of the past. But employers are going ahead anyway. When pension cuts were proposed by UUK in 2018, on the basis of similarly flawed arguments, members of UCU went on strike to defend their pensions and won: the proposed cuts were not made and the JEP was set up, giving staff hope that economic sense, financial sense, scientific rigour and greater transparency would prevail at USS. But now in 2021, even more severe cuts are being proposed on even flimsier grounds.

What is happening now and what you can do

If the vote for industrial action is successful, UCU will go back to UUK and USS after 4^th November and ask them to withdraw the planned cuts and work together. If they don’t then we’ll be in the situation no-one wants, and UCU members will withdraw our labour and picket campus. If staff do go on strike, we will be standing up for ourselves and for the College which needs a good, affordable, guaranteed pension scheme so that people want to work here and so that an academic or academic-related career is desirable and attainable for future generations. But we don’t want to strike.  You can help by writing to the Provost and President to ask them to be scientific, to look at the evidence and to show leadership by asking that UUK work with UCU to avoid this dispute.

Dear Ian,

Just over a month ago, 27/1/20, you wrote to all staff:

“This year’s pay and benefit consultation will be informed by the new Pay and Employment Benchmarking Report (from a working group led by Professor Nigel Brandon, Dean of Engineering). This compares salaries and benefits from comparable institutions in the US and Europe. The report will be reviewed by Provost’s Board this week, and a decision made on implementing its recommendations. Our aspiration is to be competitive in our compensation, recognizing the different environments in which we and our competitors operate. The report and the outcomes of the Board’s deliberation on alignment of pay to comparator benchmarks will be shared with you.”

In February’s FoE MC Summary, sent to EEE staff on 4/3/20 we were told:

“Audrey Fraser, Head of Reward, Engagement and Policy in Human Resources joined the FMC to provide an update on the pay and benefits benchmarking data generated by UCEA. The benchmarking now enabled comparisons of academic pay and benefits with leading London universities in STEM subjects, Russell Group universities, and selected US and European institutions. The data will be discussed at the March meeting of Provost’s Board, with the intention that this robust emerging data set will be used every 1-2 years to inform the approach to pay and benefits at Imperial. Members noted that the costs of living in/near London are also a significant factor for staff and a review of housing support is also going to be carried out over the coming year.”

The Pay and Employment Benchmarking Report was one of management’s responses to the 2018 industrial action. It is disappointing that consideration of this report by the Provost Board was delayed from January to March, especially as you were informed on 27/1/20 that members at Imperial UCU had voted for industrial action on pay. To postpone consideration by senior management of the pay information that might help them better understand the vote for action is difficult to understand. Certainly it meant that the Provost Board could not use that information to reassess the basis of our claim and consider if the strike could be averted in a timely manner.

Staff are very reluctant to take industrial action. In fact the current strike is the first on pay since Imperial left national negotiations in 2005. Richard Sykes, the Rector at the time, said a local settlement was necessary to give staff at Imperial the pay they deserved. But since Sykes left in 2008, pay levels at Imperial have fallen by 12.2% in real terms. That figure represents the subsequent drop in the value of the annual settlement at Imperial with respect to the local measure of inflation, CPIH London, as supplied by College to inform our local pay negotiations. College might be reluctant to use CPIH London, but it is the measure that best reflects the pressures staff at Imperial face.

In your latest response to us, below, you seek to assure us that our views will be taken into consideration. However, there is no mention of the Pay and Employment Benchmarking Report, and you state, without any justification, that national as well as local inflation should inform the pay settlement. It is difficult to feel reassured if key information is either being ignored or discounted.

Finally, regarding transparency, particularly the policy of pay in lieu of pensions, it should be noted how that policy affected pay for all staff after its implementation in 2016. Looking at ranked salaries in the period from 2015 to 2017, the College accounts show there was a very considerable uplift in the salaries enjoyed by the highest paid staff:

Such an increase was the result of a decision by senior management to compensate themselves for the change in pension taxation introduced in 2016. In the current dispute, in answer to a questionnaire from UUK, Imperial’s senior management stated they did not want to offer any compensation for the increase in USS employee contributions faced by the majority staff at Imperial.

All the best

Tom

_________________

W Thomas Pike

Professor in Microengineering
Optical and Semiconductor Devices
Electrical and Electronic Engineering
Imperial College London SW7 2AZ