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University staff balloting for pension strikes £240,000 worse off as costs rise and benefits cut

3 September 2019 | last updated: 16 September 2019

University staff being balloted for strike action are paying far more for their pension, but will lose tens of thousands of pounds in retirement because of a series of detrimental changes made to the Universities Superannuation Scheme (USS) since 2011, according to new analysis.

According to modelling by First Actuarial, because of the changes to USS, a typical member will pay around £40,000 more in to their pension, but receive almost £200,000 less in retirement leaving them £240,000 worse off in total. That is compared to a hypothetical member who also joined in 2011 on the same conditions, but has not been affected by any of the changes brought in since then.

UCU is balloting over 52,000 USS members in 69 UK universities* for strike action. That ballot opens on Monday 9 September. It will run at the same time a ballot over pay, equality, job security and workloads at 147 UK universities. Both ballots close on Wednesday 30 October.

The analysis looks at how recent changes to the scheme - including increasing contribution levels from 6.35% of salary in 2011 to 9.6% from next month, the closure of the final salary element and a restriction on defined benefits - have affected members' costs and retirement package.

UCU said that, while the analysis shows that those that earn more will lose more, the impact of increased costs on those on lower wages must not be discounted and warned some members may leave the scheme.

The union said USS members have been frustrated by a lack of progress in the dispute that saw universities brought to standstill last year by unprecedented levels of strike action, staving off plans to abolish the defined benefit element of USS.

Last month universities pushed through plans to make members pay 9.6% of their salary into their USS pension, compared to 8.8% at present. The union previously wrote to universities in June and warned that if they did not agree to limit members' contributions to 8%, or meet the cost of any additional contributions, then they faced the risk of a strike action ballot.

UCU general secretary Jo Grady said: 'This analysis details the substantial losses suffered by USS members in recent years. A typical USS member will be around £240,000 worse off because of the changes made to the scheme since 2011. It is no wonder they have had enough and ballots for strike action open on Monday. 

'The latest round of increased contributions backed by universities represents another pay cut for staff. We are concerned that those on lower pay may well decide they simply cannot afford to pay for a pension any more, putting the future of the scheme at risk.

'Universities have to recognise the anger and frustration that members feel about the recent changes, how the scheme has been valued and how it has been run. It is not good enough to come back time and again with proposals that force members to pay more for reduced benefits.'

Total loss to members under changes to USS (benefit cuts and contribution increases)

Staff profile

Total lost in benefits

Extra paid in contributions

Loss total

Starts on spine point 37 earning £40,792 and moves up to £48,677

£134,000

£39,300

£173,300

Starts on spine point 37 earning £40,792 and moves up to £59,828

£198,300

£40,900

£239,200

Starts on spine point 37 earning £40,792 and moves up to £110,217

£689,100

£45,300

£734,400

Works 20 hours a week. Earns £11.40 an hour for first three years, £14.90 thereafter

£41,800

£16,200

£58,000

Works 30 hours a week. Earns £11.40 an hour for first three years, £14.90 thereafter

£60,100

£24,200

£84,300

Assumes all work 30 years paying into USS. Retirement of 27 years. Salary growth of CPI+2%

* University of Aberdeen
Aberystwyth University
Aston University
Bangor University
University of Bath
Queen's University of Belfast
Birkbeck, University of London
University of Birmingham
University of Bradford
University of Bristol
Brunel University, London
University of Cambridge
Cardiff University
City, University of London
Courtauld Institute of Art
Cranfield University
University of Dundee
University of Durham
University of East Anglia
University of Edinburgh
University of Essex
University of Exeter
University of Glasgow
Goldsmiths University, London
Heriot-Watt University
University of Hull
Imperial College
Institute of Development Studies
University of Keele
University of Kent
King's College London
University of Lancaster
University of Leeds
University of Leicester
Liverpool School of Tropical Medicine
University of Liverpool
London School of Hygiene and Tropical Medicine
London School of Economics and Political Science
Loughborough University
University of Manchester
Newcastle University
University of Nottingham
Open University
University of Oxford
Queen Mary University of London
University of Reading
Royal Holloway, University of London
Royal Veterinary College
Ruskin College
School of Oriental and African Studies (SOAS)
University of Salford
Scottish Association for Marine Science
University of London (Institutes and activities)
University of Sheffield
University of Southampton
University of St Andrews
St George's University of London
University of Stirling
University of Strathclyde
University of Surrey
University of Sussex
Swansea University
University of Wales Trinity St David's
University of Ulster
University of Suffolk
The School of Pharmacy and IOE, University College London
University of Wales
University of Warwick
University of York

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