UK university unions on Monday accused bosses of failing to invest in staff as the sector’s pension fund moved into surplus months after steep retirement benefit cuts were imposed on thousands of members.

The intervention by the University and College Union comes ahead of a ballot for industrial action next month, which is part of a long-running dispute over pay, pensions and working conditions.

Jo Grady, the UCU’s general secretary, accused university chiefs of “hoarding billions of pounds in cash”, as the union published an analysis of the finances of the 145 higher education institutions involved in the dispute.

It found that collectively their holdings of cash and liquid assets had grown by £3.4bn in the 12 months to April 2021, while spending on staff increased by just £200mn. Combined revenues rose to £41.1bn, up from £39.6bn the previous year.

Grady accused the vice-chancellors of 145 institutions of “holding down staff wages, cutting pensions and plunging thousands into hardship” and called on them to use some of the surplus to improve pay and conditions.

The Universities and Colleges Employers Association (UCEA), which represents vice-chancellors on pay disputes, said the aggregate figures “mask[ed] considerable variation between [higher education] institutions”, which differ enormously in their financial robustness.

“Each institution has a legal duty to balance its books and the nationally negotiated pay uplift has to be affordable for all 145 institutions,” UCEA added in a statement. “Many . . . institutions are working hard to avoid redundancies, and others are struggling to balance budgets to maintain staffing levels, while delivering this year’s pay uplift into staff pockets.”

The attempts to step up pressure on employers by the union followed publication late last week by the Universities Superannuation Scheme (USS) that showed the sector’s £77bn pension fund had a surplus of £1.8bn — its first since 2008.

The fund’s move into surplus comes less than 18 months after a valuation, carried out while global markets crashed in the early days of the coronavirus pandemic, identified a £14bn deficit in the scheme, which has 500,000 members.

The huge hole triggered industrial unrest as vice-chancellors sought to plug the deficit by pushing through cuts to pensions for the 200,000 members paying into the USS, the UK’s largest private sector defined benefit plan.

The UCU, which represents more than 120,000 lecturers and administrative staff, said the scheme’s move into surplus meant employers must act immediately to reverse the cuts to new pension accruals imposed in April this year. The union calculated that the measure would cut a typical lecturer’s guaranteed pension by a third.

“We have said time and again that USS is an extremely strong pension scheme with excellent long-term prospects. News that the scheme is in significant surplus is just the latest vindication of our position,” Grady said last week.

Bill Galvin, chief executive of USS, has written to employers suggesting that the improved finances could prompt discussions about raising benefits or cutting pensions contributions.

However, he added that “caution” was required because of uncertainty around rising inflation and interest rates in a volatile economy, and the fact that improvements were identified as part of a monitoring report, rather than a full formal valuation for the pension fund.

Universities UK, the sector’s trade body, said the surplus was “positive news” but dismissed demands for the cuts to pensions to be reinstated immediately, noting that markets remained “highly volatile”.

Articles You May Like

Mortgage refinance demand surges even as rates cross back over 7%. Here’s why
Richmond changes direction on stadium issuance
Muni slightly firmer, investors prepare for CPI report
Beyoncé bounce: Western boot sales jump more than 20% week over week since ‘Cowboy Carter’ launch
California sells $1.5B GOs into mixed market while mutual funds report inflows