Failure to secure university pensions deal would cost £1bn a year, bosses warn
Failure to secure a deal on the university pensions scheme at the heart of a bitter row between employers and workers would cost universities and their staff £1 billion a year, it has been suggested.
As a third day of strike action over changes to the Universities Superannuation Scheme (USS) drew to a close, Universities UK (UUK) said it would be irresponsible of employers to walk away from the proposals currently on the table without an alternative being agreed.
The ongoing dispute centres on proposals put by UUK in January which would see the USS move from a "defined benefit" scheme, giving workers a guaranteed income in their retirement, to become a "defined contribution" scheme in which pensions are subject to fluctuations in the stock market.
These proposals were approved by the Joint Negotiating Committee (JNC) which is the formal, legal forum for deciding changes to the USS.
Without this decision, the USS would have had to resort to the default position of increasing employer and worker contributions to meet the £1 billion annual increase in the cost of USS pensions, UUK said.
It argued that most universities already pay 18% of salaries in pension contributions and cannot afford to pay more without diverting money from other areas, such as teaching and research.
"The only way of avoiding such potentially damaging increases in contributions and managing future risk to the scheme is for pension benefit reforms to be agreed ahead of the June 30 deadline," UUK said in a statement.
It added that the proposals were approved following 35 meetings between employers and union officials.
A UUK spokesman said: "Having failed to put forward a credible suggestion in the past year, we look forward to union leaders' proposal that provides good pensions, is affordable and secures the future of USS.
"The JNC voted in favour of the employer proposal that, we believe, meets these requirements in the best way possible, given the challenges the scheme faces.
"We will of course consider any credible and affordable alternative to the JNC decision, but it would be irresponsible of employers to walk away from the JNC ruling without an alternative being agreed. No deal would put jobs and the high quality of education that students rightly expect at risk."
Strike action is taking place at 61 universities across the country.
It is understood that Liberal Democrat leader Sir Vince Cable has pulled out of an event at University College London this evening, due to the industrial action.
UCU general secretary Sally Hunt said: "As we said on Friday, we want to get back round the table to get things sorted. We will be at the talks tomorrow looking to negotiate a settlement to this dispute. We hope that UUK will stop playing games and we can finally get down to business.
"To come to these talks unprepared to explore ways to end the dispute would be a huge insult to staff and to students and render them meaningless. Thanks must go to the vice-chancellors and politicians who forced UUK back to the negotiating table."