I tend to glaze over and my mind wanders as soon as pensions are mentioned. I’ve potentially got at least another 26 years of work ahead of me and I struggle to think about what’s happening next month let alone in the year 2044! The current changes proposed by Universities UK are forcing us employees in higher education to become experts in pensions so here’s me trying to get my head around what the hell is going on. It’s also a way of me finding that nugget of anger that I feel I need to sustain me for 14 days of picketing!
Most of my friends don’t have a pension. As freelance cultural workers they can’t necessarily afford to pay into one. I became a salaried employee for the first time in 2010, aged 33. That was the first time I could afford to join a pension scheme. There are precarious generations heading into pension black holes.
Birkbeck relies a lot on hourly paid teaching and scholarship staff. Many of them have uncertain futures in terms of employment and pensions (they aren’t putting as much in and so won’t get as much back). The most precarious workers are unsurprisingly the worst off in terms of financial long term security. This is worth baring in mind as we enter 14 days of unpaid strike action.
My pension is called the Universities Superannuation Scheme. It is the largest private sector pension in the country.
Universities UK (UUK), ‘the voice of universities’, has proposed changes to this scheme.
Currently as an employee 26% of my salary goes into the USS defined benefit pension scheme (8% from my salary and 18% from my employer). These pension benefits are based on each year’s salary throughout the period of my membership to the scheme.
UUK wants to close this scheme and transfer our investments into a full defined contribution fund.
It’s really important we understand the difference between these, as this is what the strike action is all about.
As far as I understand it, a defined benefit scheme places the financial risk on the employer (that’s what we’ve currently got) whereas a defined contribution plan places the financial risk on the employee. So you can see why this move is popular for UUK and the university employers they represent.
According to Alistair Jarvis, Chief Executive of UUK: “Without reform now, universities will likely be forced to divert funding allocated from research and teaching to fill a pensions funding gap, or if they did not, they would risk the sustainability of USS. The option of no reform is a dangerous gamble. It is a risk that employers cannot take.”
The UUK proposal is to shift this risk onto the individual employees leaving the university more able to survive the turbulent times ahead. Pension pots invest in the markets to make interest, enabling them to pay people back the salaries they decided to defer when they can no longer work (I’m sure it’s more complicated than that, but that’s how I understand it). It’s a risky business, the questions are where does that risk lie, who takes that risk and at what cost? The defined benefit pension means as employees we are protected from the fluctuating profits and losses of those markets – our employer is still responsible for paying us that pension, no matter what how the investments perform. We know we will have a guaranteed, fixed amount once we retire.
Changing the scheme to a defined contribution fund would mean as employees we are likely to have less income from this scheme when we retire. Employees “may be faced with a decision to delay retirement or find a source of supplemental income when they retire” . According to First Actuarial “lecturers who started working in 2007 and have 10 years of service will lose out on £131,000, a loss of £6,100 annually, while staff with 20 years of service could lose out on £35,000 in total by the time they retire in 2027”.
I can’t imagine ever retiring, but at some point I imagine I will have to stop working. As a parent of a 2 year old with learning difficulties, in 25 years time when I am 66 and Alice is 27 I may well still be a carer. If a defined benefit pension scheme is one guaranteed way I can support her and others who haven’t had the benefits of being able to pay into a pension so far, then that is definitely a fight worth having, in my opinion. Especially given the demise of disability benefits and state pensions.
We had a high turn out at Birkbeck in our ballot for industrial action over this. 53.7% of members returned their ballot papers (I wish it had been higher, why did so many not return their ballot?!). Of them, 93.7% voted to strike. We had the first of our weekly meetings at Birkbeck to organise which was really well attended. People are angry and now I’ve found my nugget of anger in this sly shifting of risk, I hope even more of my colleagues will get angry too.
By joining the picket lines from 22 Feb I am prepared to lose pay for the days I am striking as I want to stand alongside my colleagues and fight these changes publicly and loudly.
I hope those who voted to strike will join us on the picket lines (if you work at Birkbeck email firstname.lastname@example.org to be added to the picket rota).
I hope those who aren’t members are encouraged to join UCU and stand with us in this fighting this threat to our terms and conditions of employment.
Email me on sophiehope[at]me.com if you have any edits to suggest, facts to add, or stories to share on this matter!
Disclaimer: These are my own thoughts and ideas on the matter, best check your union branches and employers for more info.