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USS pensions dispute

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A message from the Warden to staff, students and friends of Goldsmiths

Update as at 13 April 2018

Following a national ballot of members, the UCU has announced that it will accept UUK’s proposal for the establishment of a Joint Expert Panel, with a membership and chair agreed by both organisations. The panel will review the current valuation and work on agreed principles for approaching any changes needed to the scheme in the future. The Panel will be asked specifically to bear in mind the value placed by members on the current scheme’s weighting towards Defined Benefit provision. 

The UCU has announced that industrial action is suspended (though the legal mandate remains live). This means, in practical terms, that the strike dates provisionally called for April are now off.

The Warden has welcomed today’s developments as a step forward towards a mutually acceptable settlement.

Update as at 28 March 2018

Following the rejection by the University and College Union’s Higher Education Committee of a joint proposal reached under the auspices of ACAS by national negotiators, further talks have been underway at a national level. Over the last month, the Warden has continued to send regular communications to students and staff as national discussions have proceeded. In recent days a new proposal from Universities UK – to establish a Joint Expert Panel with the UCU to review the current USS valuation – has been considered by UCU branches and its Higher Education Committee. Today, the UCU has announced that a national ballot of its members will be undertaken after Easter, to decide whether the union will accept this plan to end the dispute.

Update as at 28 February 2018

Further to his open letter below and following news that further talks on the future of the USS pension scheme would be scheduled between the University and College Union and Universities UK, the Warden commented:

It is encouraging that both employer and employee representatives have resumed talks, but for such talks to offer a realistic prospect of ending the current strikes then both sides need to be prepared to review their positions on the extent of the financial challenge facing the USS. A shared understanding, at least to reduce the current gap in estimates between the two sides, would create a firmer foundation for reaching a mutually agreeable settlement that the sector needs to achieve as a matter of urgency. UCU’s proposal presented last night appears to me to be a concrete step towards this.

Open Letter of 15 February 2018

Dear Staff, Students and Friends of the College,

Over the past couple of weeks, I have received a lot of correspondence regarding the proposed UCU industrial action and the state of the USS pension fund, which is at the heart of the planned strikes. A number of questions have been raised and this letter seeks to give my perspectives, and those of Goldsmiths’ Senior Management Team.

There are three broad matters I wish to address:

  • Our financial position and the implications for further employer pension contributions.
  • The consequences of industrial action.
  • Our desire to see all parties return to the negotiating table to resolve this dispute.

Goldsmiths is not a direct negotiating party in this dispute. Through the Joint Negotiating Committee, the formal and legally established forum for deciding on changes to USS, the employers (through Universities UK, which formally represents over 350 participating USS employers) negotiate with a UCU team. Additionally, the USS is a sector-wide scheme rather than a Goldsmiths-specific one. In writing this letter, I am very much aware of the limited direct control and influence we have in the resolution of this dispute.

However, I believe that all of our staff have a right to good pensions. Universities play a hugely important role in public life, with institutions such as Goldsmiths having a major impact on cultural and creative endeavours across the globe. Alongside decent salaries and other employment provision, the contribution that all of our staff make must be recognised in the form of fair and sustainable pensions.

Goldsmiths’ financial position

Goldsmiths faces a particular dilemma. Unlike many other UK universities, we do not consistently achieve financial surpluses, nor do we seek to run consistent deficits. What we receive in fees and grants gets paid out in salaries, overheads and interest costs. After capital expenditure and debt repayment, our cash balances reduce each year, and, if we were to run consistent deficits, could soon be exhausted.

This limits our ability to make additional contributions to pension schemes – even if this approach was agreed by employers and unions nationally. For example, increases in employer contributions to the USS of 5.5 to 7 percentage points (from the current 18%) have been mooted. Such an increase would cost Goldsmiths an additional £2.2 million to £2.8 million per annum.

The annual cash cost of pensions schemes to the College is currently around £9 million (comprising both the USS and LPFA schemes). This represents 7.8% of the College’s 2016/17 income paid over in cash contributions. So, to give an example, over the course of three years a Home/EU undergraduate paying annual fees of £9,250 will have seen around £2,150 of their fees paid into our pension schemes. I fully accept that some students may wish to see more of their fees spent on staff pensions, but for an institution such as ours this would come at a cost that many in the Goldsmiths community will find unpalatable.

If pension contributions increase significantly, the only practical option open to us in the short term is fundamental restructuring of our operations. We would have to reduce staff and other costs, raise tuition fees where possible, and increase the student:staff ratio. This isn’t ideological managerialism, it is basic arithmetic if the money coming into the College is to continue to match the money going out. Perhaps more acceptably, we can diversify our income streams – and this is a strategic priority for the College – but it takes time to achieve.

So, you will see from this analysis that Goldsmiths faces a significant credibility issue should it decide to lead the charge on calls for pension contributions to be increased.

The consequences of industrial action

Students are rightly concerned about disruptions to their study that industrial action will inevitably bring. I cannot predict what will happen with certainty, but the College will work to mitigate the effect on students as far as possible. We will, of course, follow due process and honour our legal obligations.

Please let me reassure you that student anxieties are shared by all across campus, and that we are working hard to provide support and guidance. An information page has been created for students, while staff can access a similar page on our intranet. We will provide further updates via our institutional channels as the position becomes clearer. A number of interested parties have also produced their own information and guidance, including the UCU, Goldsmiths Students’ Union, and Universities UK.

A return to negotiations

This is a complex problem. It is frustrating to see it portrayed in simplistic terms as “academics versus management”, especially when the USS covers – and the UCU represents – a wide range of university staff, including non-academic colleagues.

As I have outlined in this letter, I also feel that the idea we might be putting “profit” before pensions completely misrepresents the challenging financial position that Goldsmiths faces.

Yet I have a bigger overarching concern. The USS is a complex beast. There are a great many figures flying around and a large number of highly sensitive long-term assumptions to be evaluated. Very few stakeholders in the pension scheme are qualified actuaries, and as a result, we lack the skills to decode and interpret the problem. The USS trustees, the employers and the UCU have all expended considerable energy in their analyses of the scheme, yet I am confident that many in the sector are none the wiser as to the true extent (or otherwise) of the USS’s problems.

We are not going to deal with this pressing matter through the “them and us” rhetoric of industrial action. This is a problem which needs to be resolved in a transparent fashion with all sides acting in good faith. That can only be achieved with all parties back round the negotiating table and with a clear account given of why views are so divergent. We need to work towards a shared understanding of the challenges faced by the USS.

Conclusion

I fully respect the decision of staff members to strike. But industrial action comes at a cost and it would be extremely complacent to assume that Goldsmiths could survive a prolonged dispute – over which we have very little control – without long term damage being done to our students and staff.

Goldsmiths’ senior management would like to see a fair and speedy resolution to this dispute for all our sakes. I remain hopeful that, with all parties round the table, this will be possible. 

Yours,
Patrick Loughrey
Warden

15 February 2018