East Midlands Retired Members Branch

Newsletter East Midlands Retired Members Branch No.22 December 2014 In this newsletter Please inform us of change of 1. 2015 March branch meeting address or email 2. USS dispute – Employers turn nasty We encourage retired members to use their home 3. False assumptions of the USS email for when you give up your work email address. 4. The politics of USS We send out a quarterly newsletter by email but only 5. State Pension Deferral an annual newsletter by post. Sending the newsletters by post is increasingly expensive and private to boot. 6. National Pensioners Convention (NPC): Women’s Working Party Event 7. Pilgrimage to Tolpuddle 2. USS dispute – Employers turn nasty 8. What Future for the NHS? The Employers have proposed massive cuts in USS for 9. UCU Retired Members Branch members still working. The proposed cuts are all based on 10. Branch meeting in Loughborough false financial premises which are detailed in following articles. UCU met the employers on 24th October and 11. More information stressed the strength of feeling among members about the 12. Pensioners manifesto - NPC detrimental USS pension proposals. The plans were the most radical restructure of the fund in its history, yet the employers could not answer important questions from UCU rd about its effects. On top of the attack on pensions there is a 1. Branch meeting 2015 March 3 warning of more cuts to come after the election. 10.30 a.m. – 12.30 p.m. With a lack of response from Employers, UCU moved to a (Speaker at 11.30 a.m.) ballot for industrial action. USS members voted Please note the earlier time overwhelmingly for strike action with a huge 45% turnout. due to the booking requirements 78% of members said they backed strike action and 87% voted for an assessment boycott. The day of action strike Speaker: Val Wood was successful and has been followed by a boycott of th Nottingham Women's History Group marking and assessment from 6 November. “Celebrating the contribution of Women's Trade Union A mixed response from the employers to UCU’s marking Activism in Nottingham - a historical perspective” boycott has left four universities facing all-out strike action in response to 100% pay docking threats. Union members at the University of Surrey have voted for a one-week The branch committee wishes all retired strike, an academic boycott and a vote of no confidence in members a merry Christmas and a vice-chancellor Christopher Snowden – the current president of UUK – if the institution’s decision to deduct prosperous new year. full pay is not rescinded. UCU general secretary Sally Hunt has written to members We apologise for the newsletter concentrating on affected by the USS dispute to update them on the latest USS. However, we suggest that TPS members talks held on 13 November. She reported that the current should read it because TPS is also in the firing boycott is being strongly supported across the country ‘and line – just wait. it is against that backdrop of strong union action in support of our negotiating strategy that the meeting finally saw some progress in three key areas’. These are: USS’ assets”. ✶ The employers agreed not to press their proposals to a Meanwhile, members’ wages are assumed to grow by the vote. retail price index plus 1% (taken to be 4.4%) plus ✶ A series of formal and informal negotiating meetings incremental increases. Over the past 20 years the actual rate have been agreed between now and the next joint was about 2.7%, with similar growth over the past 10 years. negotiating committee meeting on 15 January 2015. Post-2008 rates show negative real-pay growth. The age- ✶ A tripartite agreement was reached that actuaries related assumption is wage growth (1% to 4%) by progress representing UCU, UUK and USS should meet to up the salary scale: anecdotally, this assumption leads to discuss the funding position. higher pay growth rates than the majority of academics have Stop press experienced over the past 10 or 20 years. As the fund’s The UCU higher education committee (HEC) met on 19th actual experience was used to give a mean retirement age of November to discuss the USS pension dispute including the 62 years at the last valuation, it seems odd that salary agreement to a programme of negotiations between now and assumptions do not also reflect actual experience. 15 January 2015. HEC also considered the following The assumptions on mortality appear to be unchanged from statement on pay docking arising from last the 2011 valuation, yet the EPF archly advances the week's negotiations: "UCU and Universities UK (UUK) statement that “members of the USS are living longer so the have confirmed, following discussions on Wednesday, an pension scheme has to pay pensions in retirement for longer agreement to suspend the industrial action in relation to the than planned” as a reason for deterioration in the fund’s USS pensions dispute from Thursday 20 November until position since 2011. after the joint negotiating committee (JNC) meeting scheduled for Thursday 15 January 2015. UCU and UUK A reasonable change in any one of these assumptions would have agreed to a series of negotiating meetings between give a lower estimated deficit. The EPF states that although now and the scheduled January JNC. It is hoped that this changing the assumptions in this instance could affect the period can be used to close the differences between the size of the deficit, “it cannot change a deficit into a negotiating positions, with a view to reaching agreement on surplus”. It takes little mathematical knowledge to reforms to the USS scheme.” recognise that this statement is wrong. UCU has submitted a paper for consideration by the Letter to THES from Funding and Benefits Working Group of the USS JNC and Saul Jacka, professor of statistics, University of Warwick, the JNC as a whole. While UCU does not accept USS’ Peter Green FRS, professor emeritus of statistics, approach to valuation and de-risking, UCU notes that University of Bristol, Steven Haberman FIA, dean, Cass significant other actors consider there is a case for change. Business School, Jane Hutton, department of statistics, UCU believes their proposal has the benefit of maintaining University of Warwick, John Aston, professor of statistics, the character of USS as a defined benefit scheme which is University of Cambridge, Sir David Spiegelhalter FRS, affordable, sustainable and attractive. It also carries the key Winton professor of the public understanding of risk, benefit of not changing the nature of the scheme beyond University of Cambridge, Charles Taylor, professor of recognition so that when economic circumstances change, statistics, University of Leeds, Simon Wood, professor of the damage is not irreparable. statistics, University of Bath, Qiwei Yao, professor of statistics, London School of Economics Michalis Zervos, For details of the proposals and data that backs them up professor of mathematics, London School of Economics. see: http://www.ucu.org.uk/circ/pdf/UCUHE236.pdf Russ Bowman THES 23rd October 2014 3. False assumptions of the USS 4. The politics of USS Letter to the THES Reasons given for an action are usually divisible into stated Recently, the Employers Pension Forum published reasons and the real reasons. The stated reasons for the “Proposed Changes to USS – Myths, Misconceptions and proposed USS changes are a mixture of regulatory and Misunderstandings”. The document contains choice by the USS Board. The USS is implausibly deemed misinformation and a mistake. We focus on the section to be in deficit due to the eschatology of assuming all pre- “M7: The assumptions used to value the fund have been 92 HE institutions simultaneously collapse and a bizarre chosen to artificially create a large deficit”. “de-risking” that envisages a wholesale move from profitable equities to a tanking bond market. Having reviewed the assumptions given in the 2013 annual report, we believe, as statisticians and financial The real reasons are easier to understand. The burden of risk mathematicians, that each assumption is inadequately is to be shifted more onto the shoulders of the employees justified and that cumulatively they are unreasonably and less on the employers. There is a significant neo-liberal pessimistic and incoherent. The predicted salary increases lobby that includes ideologues such as Michael Johnson and assume a buoyant economy while investment returns John Ralfe together with the powerful financial industry and assume a recession. the self-interest of some HE top managers that are pushing these changes. For example, the average annual rate of return on assets achieved by the Universities Superannuation Scheme over Ideologues such as Michael Johnson of the Centre for the past 10 years was about 7% and over the past five years Policy Studies see public sector Defined Benefit (DB) about 11%. It is therefore difficult to understand the EPF’s pensions as a mill stone weighing down British Commerce assertion that “since 2011…the continuing global economic and Industry; the original sin goes back to the 1945-50 challenges…have had a detrimental impact on the value of Labour Government that introduced the parasitic Welfare State. The way to supersede DB schemes is to gradually 6. National Pensioners Convention introduce a Defined Contribution (DC) element. (Michael Johnson “Don’t let this crisis go to waste” CPS Sept 2009). (NPC): Women’s Working Party Event This is precisely the manoeuvre being attempted with the This event was held at Tony Benn House (UNITE building), USS. This first step could be applied to all Public Sector in Bristol on 1st November 2014. Participants had travelled pensions. from around the country including Devon and Cornwall, Derbyshire and even Liverpool, as well as locally from the the eventual removal of a DB pension scheme opens the Bristol area, to attend.

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