Why we are advising you to reject the UUK offer - a message from the Branch President

Why we are recommending that you reject this offer: a message from the Branch president

Dear Colleague

As you will have seen, an offer was received by UCU on Friday 23 March, setting out some a proposal from UUK (the employers’ organisation).

This offer was quickly sent out to UCU’s membership by our General Secretary (Sally Hunt) who wanted it to go straight to ballot. This is in spite of the majority of branches around the country reporting members were confused about the content of the proposal, the definition of terms used, and what assurances we have about its outcomes. There was deep concern that this deal had not be negotiated at ACAS by our elected negotiators to improve the document or at least clarify its ambiguities.

The deal is now being put to members in what can only be described as a rush. The UCL UCU branch Executive is advising that the current shape of this deal contains too many dangers, crucial ambiguities, and potential traps to be able to recommend it

Here, I set out some of the key problems with it that any negotiator would see as not simply worrying but hostages to fortune that the employers are likely to use to their advantage (you can, in fact, see a video of one of our elected negotiators saying exactly that). After the table, I also consider some key reasons people might have doubts about rejecting this offer.

1. Guarantee of existing DB benefits for 1 year (until April 2019)
The employers’ offer makes much of this guarantee – however this is highly disingenuous (indicating the duplicitous nature of the offer and the way it has been made). We already have our existing DB pension secured until April 2019, because that is the implementation time for scheme changes (there is a consultation for 60 days, then a build-up to implementation at that date). So, the “new” offer offers something we already have.

We cannot in all conscience advise our members to accept an offer containing binding clauses that contain no clear substantive protection for UCU members in terms of their pension benefits, and the “guarantee” is no such protection. It’s inclusion seems designed to mislead members as to the generosity of UUK in offering this deal, in addition to all the other problems the offer contains (see below).
2. Ambiguity in key terms 1: the offer speaks of a commitment to securing a “comparable pension” to the existing DB one
The employers were explicit in saying that they thought the 100% DC scheme they wanted to impose on us is “broadly comparable” to our existing DB scheme.
A letter from Alastair Jarvis to Sally Hunt on the morning of Weds 28 March, says the employers are committed to a “meaningful DB pension scheme” however, the employers were explicit in the past in saying that the offer made on 12 March at ACAS (see below) was a “meaningful DB scheme", and there has been no explicit commitment that a similar offer to that (perhaps with some minor improvements) is off the table. There is nothing in the actual wording of the offer that avoids that. Some commentators argue there  good reason to think that this (or something similar) is what UUK are likely impose for the life of this valuation (3 years), unless pressured to guarantee otherwise. The important point, however, is that we have no statement of clear minimum guaranteed provisions for our pensions - not one. Some knowledgeable commentators have pointed out that despite the nice words, the existing DC imposed changes are still on the table.
Update 2: Jane Beer (President of UUK) has gone on the record to say UUK committed to a solution with an "element of defined benefit" - again the 12 Mar offer or even DB capped at 15% of salary is an "element".
With no clarity on what the employers mean by this, accepting this offer and signing on the dotted line would potentially commit us to an outcome that is as harmful as the one that precipitated the strike. We cannot in all conscience recommend a deal that endangers our members’ pensions, making them subject to the choices of the employer in interpreting these.
3. Ambiguity in key terms 2: The offer contains a ‘Trojan horse’, that if agreed by us can be leveraged to undermine any fair pension claims we make. It says that the pensions scheme that results must be subject to the constraint of “affordability”, and that constraint is not defined.
This is extremely problematic because “affordability” for the employers is understood in terms of their priorities for the sector, such as generating surpluses that can go to buildings and campus expansion, as they chase student numbers. It is “affordability” in the sense of Senior Management priorities that motivated the attack on our pensions. Giving that away as a condition gives away too much.

We cannot in all conscience advise our members to accept a deal that commits us to replacing their DB pensions with a scheme that is simply subject to employer conceptions of “affordability”
4. The proposal contains the commitment to create an Independent Experts Panel, as a way of addressing the current discontent among scheme members with the methodology for valuing the pensions scheme (the methodology that has created the deficit).
i. The terms of reference of IEP are not only extremely unclear, it seems that the aim is for this body to review valuations rather than change the terms in which they are carried out.
ii. It will not have power to change an existing valuation, such as the last one the assumptions of which have created the controversy and provoked the strikes. Its findings will not, as USS has stated, be binding on USS trustees.
iii. Not only that, the IEP does not decide what pension benefits and costs should arise from valuations – that is still a matter for USS, and the employers have a majority on the USS bodies that decide our pensions benefit structure (given the “independent chair” always votes with the employers).
iii. In addition to this, the offer says nothing on whether the results of the panel will be binding on anyone, or what would happen if the panel reaches deadlock (given both sides will be able to recommend appointments to it.
Decisions on our pensions will still be made by the Joint Negotiation Committee of USS (JNC), to which the IEP will only be able to make recommendations (remember it was the JNC that decided to introduce a 100% DC scheme in the first place).
iv. The offer contains no deadlines or time lines (other than that the current DB arrangements end on April 2019) – and so this places a hugely important factor in the hands of the employers to decide – at least in terms of potential stalling. In the absence of some leverage from UCU members, there is no standing incentive to accept fair or reasonable terms at any stage.
It is also worth noting that we have been here before. The idea of a review of the valuation methodology was one of the employers' "concessions" for ending the last dispute over USS (which lost us Final Salary pensions). If that was ever carried out, it has has no positive effect on the employers' aims to convert to DC, dating back to 2014.
Whilst this IEP element might be welcome, were there clear answers to key details, it is currently a “black box” process with its parameters so under-specified that it could result in simply rubber-stamping the existing employers’ valuation position, deadlock, or even be ignored by the USS JNC in deciding how to structure our pensions. Even if it did do good work in challenging the existing assumptions behind the deficit-generating valuations of USS, this might offer improvements over the longer-term, still leaving us with the question of what happens to our pensions now. The offer contains no substantive guarantees about any specific level of DB pension security for the next 3yrs, at minimum.
5. Does the offer leave UCU with any leverage over subsequent discussions and processes?

It has subsequently become clear that the employers expect the offer to signal the end of industrial action altogether –
The VC of St Andrews (who is on the board of UUK) University wrote to staff there explicitly stating that the deal was designed to end the strike action (rather than solve the pensions problem: “Its immediate aim is to lift the threat of further strikes and end the current industrial action, a matter that has been a source of obvious concern to us all, and most particularly to our students at a crucial point in the academic calendar”, he wrote). UUK waited until the UCU leadership agreed to ballot members and then announced they were changing their offer to say employers would only support on the condition industrial action (which includes ASOS) is suspended.
With no leverage over a process that the agreement fails to specify in crucial respects, too much is left out of UCU members’ control. We cannot recommend that members vote for a deal that leaves them and their pensions vulnerable to erosion in favour of the perceived interests of the employers represented by UUK.

What was wrong with the 12 March/ACAS-negotiated offer?
For the overwhelming majority of those of us who voted for strike action, participated in the strikes, and fought to secure our DB pensions, the ACAS offer was seen as derisory, not only because it came with strings about unpaid rescheduling of the lost teaching, but also because the content of the offer is close to being as damaging to our pensions as the original proposal to impose a 100% DC scheme that precipitated the strike.

That offer included capping DB pension provision at £42K of salary, meaning colleagues could potentially could lose 15-19% of their pension on that basis. In addition, the proposal incorporated an inflation provision of CPI but capped at 2.5%. Over a significant period of time, this provision could itself lead to a loss of tens of percentage points from one’s pension over time (one estimate has this at 26%). On 12 March this cap was only for one year, but the new offer will seek a resolution for a valuation cycle (3 years), and quite possibly once established that could be the deal with which we are stuck. Add to that the reduced accrual rate in the deal (1/85), and one has a deal that is potentially as bad a deal, depending on the individual case, as the 100% DC scheme imposition that started the strike. Not only that, as some analysts have convincingly argued, this offer would, if implemented, be incredibly inequitable.

Can we not just give UUK the benefit of the doubt, with the threat of restarting strike action if things go badly for us?
Unfortunately, accepting the offer in the ballot will lead to an agreement on that offer (given one cannot negotiate to change an offer the members have already accepted). Once embroiled in a potentially long process, with starts, stops, and exhausting news flows as an IEP panel is set up, whilst in parallel UUK seeks to reduce our pensions deal using the clauses mentioned above, we will see members of the union both demoralised and potentially confused. Of huge importance is that this deal places the timelines firmly in the control of UUK, and so permits them to use those to time us out by, say, releasing decisions in spaced-out dribs and drabs (“death by a thousand cuts”) or at points when generating effective strike action is difficult. If the deal makes this possible, by agreeing to it we will have reduced our means to block any of its potential adverse effects.

Our employers are highly motivated by the aim of investing in capital projects and expansion as they chase student numbers, they have a powerful interest in not seeing things from our point of view. Relying on their good will without leverage would not be wise, as important lessons from the junior doctors’ dispute warn us. The employers are also currently weak, terrified by exams disruptions and international reputational damage (especially in relation to lucrative international student pools). We can and should press our advantage at this point, to secure clear terms and guarantees relating to our pension benefits, rather than handing them back the advantage.

Addressing some responses to the ‘Reject!’ position
One response is that it is unclear what continuing industrial action (ASOS; Strikes in Exam Period; Strikes aimed at the beginning of term I) can aim to achieve. The position of the UCL branch of UCU is that we should be fighting for the status quo on our pensions. However, even if one does not hold that position, there are other bottom lines that could be secured that are not as sacrificial of our pensions as the options this deal has the potential of permitting. As Sam Marsh, a UCU official and key expert on the USS crisis, has pointed out a bottom line from which to start this process (not necessarily where to end it) would be an increase in employer contributions to secure a close to status quo pension provision for 3 years (one cycle of the valuation). Some commentators have argued that asking for the moon will get you nothing, or that the “perfect is the enemy of the good”. However, giving up the most crucial concrete demands on our pensions provision in exchange for dangerous ambiguity is not “the good”, it is potentially a path to losing any guarantee that we can retire with dignity.

It has also been said that by continuing the strike action we will lose the support of the students who have shown so much solidarity until now, and potentially start to lose support from within the union too, with people abandoning the strike. There are important dilemmas here, as commentators have pointed out. However, the proposal is not for an exam boycott, but for ASOS and targeted strike action that is disruptive of exam timelines and results dates. There are significant losses to students, but these should be looked at in the context of huge damage to people’s dignity in old age, and the fact that it is in the power of universities to fix the situation in time by acting fairly.

What is equally important is that when the employers are in a weak position, and we still have leverage, we should be pushing for more clarity, more disambiguation, and where possible better guarantees, rather than ceding so much ground to them for minimal gain. Given the structure of the ballot, we can only force those improvements by voting to reject the deal.

Faced with these inherent and significant problems with the offer from UUK (dangerous ambiguity, Trojan horses), the only recommendation can be to vote ‘Reject!’ To recommend anything else would be irresponsible on the part of your union officers and Executive, and would undermine our commitment to fight for pension security for our members. Your lawyer would not advise you to sign a contract the provisions of which are ambiguous enough to make you vulnerable to significant detriments, and we cannot advise you to do that with an agreement on your pension – your guarantee of dignity in retirement after a life of work.

Branch President

Facebook: @universitycollegelondonUCU
Twitter: @UCL_UCU
email: ucu@ucl.ac.uk

Appendix: Some quick technical points

Timetables: Sally Hunt (General Secretary of UCU) has made a great deal out of the employers’ timetable, and their deadline of the 11 April 2018 meeting of JNC when they will decide on which scheme option to begin consulting USS members. Similarly, Mike Otsuka, a commentator on the dispute, has emphasised this deadline as significant. However, its significance depends to a large extent on industrial action. That meeting might be the beginning of a required consultation by USS lasing 60 days. The implementation of the actual scheme changes would not happen until April 2019. A number of things can happen, including the development of an “interim valuation” that could derail that process. In order to halt it or alter it, however, USS and UUK must see that the industrial dispute represents a huge crisis in HE that they cannot control. They must accept fair terms and being to offer guarantees that they will alter their proposals to impose their version of the scheme changes.

Another argument is that the deadlines for the USS JNC, including the 11 April meeting, are pushed by the deadline of June 30 set by the Pensions Regulator for confirming a valuation and resolving the scheme situation. However, as much as people might tell you that these deadlines are immutable, there is plenty of evidence that they are not when there is a crisis. The Royal Mail pensions plan trustee produced a valuation in 2015 that lead to significant threats of industrial action by the Postal Workers Union. As a result, their valuation was not actually confirmed until June 2017 – more than the statutory 15 months after the Pensions Regulator deadline. Crises shift institutions, and refusing to stop industrial action represents a crisis.

Useful resources on the problems with accepting this offer

Why the employers cannot be trusted - this is a long term plan: https://medium.com/ussbriefs/the-drive-to-convert-to-dc-a-short-history-15079dc18182

#USSBriefs is an excellent collective source of information on the dispute by a group of academics.

The health of the fund and its capacity to support our pensions: https://www.timeshighereducation.com/news/no-one-knows-sure-deficit-heart-uss-dispute-debated

Sam Marsh (and early warner on the problems the employers were introducing into the scheme 3 years ago, writing about the problems with the current offer): http://ucu.group.shef.ac.uk/why-which-way-to-vote-on-the-latest-uuk-proposal-should-be-an-easy-decision/

Lee Jones on the rush to ballot before seeking clarifications and assurances: https://medium.com/@drleejones/ucus-rush-to-e-ballot-reflects-the-weakness-of-union-democracy-c892e316ebf

Sam James (Cambridge UCU Vice President) on why the ‘suspend industrial action’ conditions is a deal breaker: https://cambridgeucuaction.wordpress.com/2018/03/31/a-mess-but-not-a-stitch-up-wednesdays-national-ucu-branch-meeting/

Steven Parfitt on the difficult dilemmas in the vote: https://jacobinmag.com/2018/03/universities-uk-strike-contract-vote-education


Popular posts from this blog

Transcript of UCU Branch Delegates Meeting 28 March 2018 - Discussing UUK Proposal

Response to UCL's Provost: time to catch up with the evidence!

UCL's Director of Finance, Phil Harding, endorsed that UUK adopt its current position and take away our DB pensions - meanwhile, Senior Management get bonuses!