Alistar Jarvis Op-Ed on Sunday Times, 18 March 2018

Universities UK chief Alistair Jarvis: union's pension demands will cost £1bn a year

This week, University and College Union (UCU) branches rejected the deal their representatives negotiated with Universities UK at the conciliation organisation, Acas. This was bitterly disappointing after both sides had worked so hard to achieve a mutually acceptable way forward for the pension scheme, the Universities Superannuation Scheme (USS). Employers, university staff and politicians called for both sides to engage in talks in the belief that a workable compromise could be achieved. That assumption now appears ill-founded.

Throughout this period of industrial action, we at Universities UK, the advocacy body for British universities, have been accused of being entrenched in our position and unwilling to compromise. It has been claimed we are bent on impoverishing university staff. But the reality is very different.

We have proposed changes only because they are necessary. Employers are trying to deal with a tough set of financial circumstances. We have a pension scheme that is in deficit and costs are increasing. The problem faced by USS and by universities is not unique: many benefits scheme trustees and employers are having to make the same difficult decisions across the UK.

According to USS rules, it is the job of representatives of the employers and university staff in the scheme to work out a way forward when payments into the scheme are no longer sufficient to meet future costs. Throughout 14 months of negotiations and over more than 40 meetings with UCU, we have tried to find the best possible proposal for scheme members, while representing, in good faith, the majority view of the scheme's 350 employers: that they were not prepared to pay more into USS.

As the views of employers started to shift, so did we, entering into further talks at Acas in hope of finding a solution that could deliver on UCU's demand for a meaningful defined benefit for scheme members, while remaining affordable for employers. That we managed to achieve a compromise proposal is testament to the flexibility of negotiators on both sides.

Employers currently contribute 18% of salaries to USS, double the private sector average. And make no mistake - paying more in would mean difficult choices over where the extra money comes from.

Universities are only as good as the quality of their staff, which is why employers are willing to raise contributions to 19.3%, as part of the Acas deal, so that the majority of USS members would retain a full defined-benefits pension.

To maintain the status quo with USS benefits, however, total contributions from employers and staff would need to rise by 11%: an extra £1bn a year. This is simply unaffordable without serious cuts to teaching, research and jobs.

I am personally truly sorry that the situation has reached this point. The time I do not spend seeking a solution, I spend in reflection on what could have been done differently to avoid this dispute that has done damage to students' academic experience and to the sector, which does such extraordinary, life-changing work.

Looking ahead, the clock is ticking on the current valuation, as there is a legal requirement to submit the plan to tackle the scheme's financial challenges to the Pensions Regulator by June 30.

Employers recognise that questions have been raised over the 2017 valuation methodology. That's why Universities UK is to establish a panel of independent experts to review the processes behind the valuation that put the fund's deficit at £6.1bn. The idea for such a panel of independent experts was agreed with UCU at the Acas talks, and it is being brought forward to address concerns over the valuation.

The panel will consider issues of methodology, assumptions and monitoring, aiming to promote greater transparency and understanding of the valuation. It will have an independent chair, involve academics and pension professionals, and will liaise with both USS and the Pensions Regulator. UCU will be invited to play a full role with the panel. I hope it will give assurance that the valuation undertaken by USS has been robust, and boost public confidence in the process.

In the interests of our students, I hope we can now reach a speedy resolution. Students are caught in the middle of this dispute through no fault of their own. They now face further rounds of industrial action and the cancellation of teaching.

We hope that UCU, in discussion with employers, will be able to agree a workable and reasonable way forward as soon as possible.

We appreciate the strength of feeling expressed by union branch secretaries. Equally, we must remember that the majority of university staff who belong to the pension scheme are not on strike. We need to listen to views across the sector on how USS should be secured so it can continue to offer valuable pensions both now and for future generations of university staff.Alistair Jarvis is chief executive of Universities UK