Current Students and Staff

// University News

UCU ballots for industrial action

The Universities and Colleges Union (UCU) has entered into two disputes with the University over the proposed changes to the USS pension scheme and the 2021 pay award.

The Provost has set out the detail of the USS dispute recently and you can read this below.  Although these are national disputes, inevitably they will have an impact on individual employers. UCU has indicated that it plans to ballot for strike action and for action short of a strike on both disputes at the University and the ballots open on 18th October. We are likely to hear the outcome of the ballots in early November.

We are naturally very disappointed that these disputes have arisen and we are working closely with our UCU colleagues at a local level to identify ways in which we can address the issues in the dispute. We recognise that very few people will relish the prospect of industrial action, especially after such a prolonged period of disruption caused by the pandemic and so we want to reassure colleagues that we are committed to working with our UCU local branch to help to bring these disputes to a satisfactory conclusion as best we can.



Dear Colleagues 

As you may be aware, there have been developments concerning the financial challenges facing the USS Pension Scheme that affect a number of colleagues. The topic of pension schemes is complex and at times baffling. There is much rhetoric deployed by all sides. I’ve tried to set out as simply as possible what I believe has happened in recent weeks.  

Following the USS Pension Scheme’s triennial 2018 valuation, contributions from employers as a proportion of salaries were due to rise from 21.1% to 23.7% this October. Employees’ contributions were due to rise from 9.6% to 11%. As part of the conclusion to industrial action in 2019 and to try and avoid the contribution increases scheduled for October 2021, the USS Trustee (a board that consists of employer, UCU and independent appointees) committed to completing a new valuation in 2020. This valuation was delivered but concluded that the pension scheme was in an even worse financial position. The Trustees of the scheme have a statutory duty to respond to valuations once commissioned and to ensure the scheme is sustainable.  

In order to maintain benefits at current levels, further increases in contributions were proposed by the USS Trustee that would have entailed employer contributions rising to between 28.5% and 37.6% and employee contributions to between 13.6% and 18.6% of salary. To put in context, the employer contribution alone could have meant over 11% of all our income would go to fund just USS pensions (if equally distributed across our income streams, that’s over £1,000 annually by each home student). 

Whilst accepting some change remained necessary to the scheme and its funding, in partnership with our local UCU branch, the University pushed back very strongly on what it saw as an excessively prudent approach to the valuation taken by USS (most notably in the selection of a pre-retirement discount rate) which had led to the need for such significant and financially disastrous increases. The Pensions Regulator (which exists, post-the Maxwell scandal, to ensure pension schemes are funded and do not fail) largely sided with USS in a letter of 26 February 2021 saying the increases were necessary, limiting an organisation like Loughborough’s ability to have significant impact. 

In late August 2021, faced with the imposition of crippling increases to employers and employees, the Joint Negotiating Committee of USS (a body composed of equal UCU and USS representatives and an independent chair) voted on a proposal from Universities UK (the umbrella body representing employers) that seeks to limit the October 2021 increase and set aside the future increases indicated by the USS Trustee as necessary. This approach required greater support to the covenant by employers (the covenant is a measure of the strength of the guarantee that institutions underpinning the scheme provide to USS), reform to member benefits and a resulting relaxation of some of the valuation assumptions by the USS Trustee. 

UCU have developed some alternative proposals that also involve reform to member benefits but which put more of the increased cost burden on employers. These proposals have not been formally submitted to the JNC for determination. UUK wrote to UCU on 7 September offering to put any agreed UCU proposal to employers: “[UUK] would be willing, if you wished us to do so, to take this to employers to seek views”. 

The JNC voted to accept the UUK proposal although national UCU representatives on JNC voted against this, with the proposal being carried by the vote of the independent chair. This proposal now needs to be subject to 60 days’ statutory consultation with members before going any further. This is likely to begin in November. 

Over the summer the University agreed the draft of a joint letter with the local UCU branch, endorsing a range of measures to make progress with this difficult situation, including the exploration of conditional indexation as a way to address long term concerns about sustainability (ie more strongly linking the inflation of member benefits to the performance of the USS assets). The University, with the local branch of UCU and others, pressed and continues to press for consideration of conditional indexation as a potential future solution.  

Loughborough University was asked in June 2021 to comment on the acceptability of the UUK proposals as part of a formal consultation by UUK. Whilst reiterating our support for conditional indexation and qualifying our position, the University reluctantly gave its support in order to prevent the only other immediately foreseeable outcome - imposition by the Trustee of crippling employer and employee contributions as outlined above. Much of the publicity around the UUK proposals has focussed on the reduction to members pension benefits. Less has been said about the choices employers would have to make were contribution increases of up to £20million per annum to come to pass, and of the 20% of eligible colleagues who have opted not to be members because of the affordability of employee contributions.   

I understand UUK is actively pursuing three areas where further progress may be possible. The first is in providing a lower cost option for those who cannot afford the employee contributions that currently exist, the second is around conditional indexation, and the third is around a governance review of USS. We hope UCU and UUK will discuss these over the coming weeks. 

We continue to enjoy good relations with the local UCU branch and will continue the constructive dialogue that we have around this and other contentious issues. I am, as is Professor Jennings, deeply concerned about the impact of industrial action on colleagues (both those taking action and those maintaining operations) and students, especially after 20 months of Covid disruption. I am also acutely aware of the need to avoid the contribution increases for employees and employers that will be imposed if the 2020 valuation is not concluded to the satisfaction of the Trustee. I hope we can find a way forwards.  

I recognise and am hugely grateful for all that colleagues have done to support each other and our students in these difficult times. I have made it clear whenever I have had an opportunity to speak to politicians, that, unlike the narrative some wish to advance, the pandemic has increased not decreased the burden on staff. Once again Loughborough University is in a position where it has very little influence to resolve the dispute yet is likely to be affected by the action. I hope we can collectively avoid that.  

Best wishes 

Professor Chris Linton 
Acting Vice-Chancellor & President