Speech to UCU SHESC on UCU-UUK Joint Expert Panel on USS pensions
Speech delivered on 7 November 2018 at the University and College Union Special HE Sector Conference, Manchester
Deepa Govindarajan Driver
Chair, USS National Dispute Committee
Lecturer in Governance, Risk and Financial Regulation, University of Reading
We have just heard from Paul about the positive news from the first phase of the JEP (Joint Expert Panel) and how the SWG (Superannuation Working Group) has endorsed the JEP findings. I am here today to offer you the NDC (USS National Dispute Committee) perspective and also a serious health warning about uncritically engaging with the JEP report.
But first I’d like to take you back to the picket lines, where we began a new kind of conversation within the UCU about our pensions and how we would respond to attempts by employers to close DB (Defined Benefit) down. Many of us, both here today at the SHESC (Special HE Sector Conference), and more widely in our membership, have paid and continue to pay the price for the strikes — in physical terms through standing together in freezing cold, missing significant chunks of what we could enjoy with our reduced pay-checks, and emotionally through the terrible struggles of conscience many of us had in relation to disadvantaging our students and taking a stance against our institutions. In particular we are conscious of, and remain grateful for the support and sacrifices of our hourly-paid, precarious and GTA (Graduate Teaching Assistants) colleagues as well as our students, in this struggle.
This is a high price that we have paid and it was a price that was demanded of us on false grounds, as the analysis from Sam Marsh and others now shows.
Although we, in academia are used to sharpening our analysis rather than raising our voices when others disagree with us, the strike came about because we felt we had to be loud and very clear. We had realised when we chose to take strike action, that this time the battle for our pensions was a political battle in addition to being about the accuracy and sophistication of our arguments.
We all know it continues to be a battle on both these fronts, when despite the arguments and clear, incontrovertible evidence — and there is much of it, thanks to the courage and dedication of colleagues like Sam Marsh, Academic Freedom Watch and notable others who kept up the pressure and scrutiny over the summer and before — employers and USS (Universities Superannuation Scheme) have shown little regard for engaging with the analysis or revisiting their positions as a result. One can see evidence of this from the employer responses to past UUK (Universities UK) consultations and their willingness to get rid of our hard-earned pensions on false pretences — not much has changed even today, given how little seriousness USS, UUK and employers have shown in engaging with and responding in a credible and honest manner to the demolition of the farce that is Test 1. You may also wish to see the publicly available video from last week of the UCL (University College London) senior management team’s engagement with these issues — to me it seems that nothing has really changed in the tone or content of many employers’ agenda, despite the revelations that the USS scheme is healthy and sustainable in its current form.
The National Dispute Committee was democratically constituted at the behest of the SHESC to provide a representative steer to the management of this dispute. It was instituted because so many of us are tired of years and years of this kind of nasty politics that works with coteries of lobbyists and so-called independent advisors while providing a cover for mates’ rates and benefits for the few rather than the many. NDC is very much a child of the strike. The strike allowed us to voice our concerns as an academic community about the blights of marketisation and financialisation, our concerns about overpaid management teams willing to invest in white elephant campuses overseas and vanity projects alongside outsourcing our colleagues’ jobs, campus sell-offs and efforts at harvesting and playing games with student data. We wanted to get rid of cosy backroom deals, dodgy conflicted consultants pretending to be independent advisors, overpaid City grandees rubber stamping the shallow analysis from the City mates, and also falsely framed and creatively timed consultations that produce pre-determined results, whether at the employer or elsewhere closer to home.
Like much of the rest of society, we are well and truly tired of falsehood and opacity and want a real change in the acceptable range of debate. We want discussions to be more cognisant of the risks posed to us members by the misrepresentation and false framing of issues. It is important to move beyond the risks as perceived or presented by our conflicted employers and their conflicted consultants. We want more sunlight and fresh examination and about ALL the important issues.
To facilitate this, we all want our union to also discuss our pensions in a transparent way, with courage and openness, with accountability for decision making all the while providing the right information and power to members to validate our choices. Not just trusting the membership with some choice issues that are framed in a particular way that suits — but opening all the key issues to more thorough scrutiny and giving us a real and meaningful say in how our pensions are organised.
This remains an important cornerstone of the NDC’s approach to the JEP and to the Marsh analysis, to which we have given serious consideration. We have also started to look at the governance failures that enabled these issues to arise, but more on that later.
First the JEP’s phase 1 report. Of course, it is easy to bask in the warmth emanating from the smugness of having our position vindicated. Yes, our position has been vindicated by the JEP. It’s easy to feel happy that the sham that was the UUK aggregation of employer risk appetite was pointed out. Yes, it was. Easy also to agree with the view that the approach to de-risking runs counter to what is right for this Scheme and in fact, counterintuitively increases risk and precipitates the closure of DB. This is all true and that gives us much satisfaction.
We however remain deeply concerned that the JEP in phase 1 does not seriously engage with some of the issues well within its remit for phase 1 and that are also areas of UCU policy — equalities for example and the disproportionate effect that these cuts to pensions will have on women for example. (Claire Marris provided a good analysis of these issues earlier this year.)
We have grave concerns that the JEP phase 1 report does not even mention — let alone engage knowledgeably with — the issue of decade-long underpayments by employers despite this being brought to their attention. These underpayments ate into the Scheme’s safety cushion and played a material role in undermining the Scheme significantly. Anyone in this room who engages with model validation, will be able to tell you that the data and assumptions that go into models matter and the data and assumptions that underpin the 2017 valuation matter too. We cannot ignore the biases in the amounts of money that are said to have gone into or be held by the Scheme. These cannot and should not be swept under the carpet when the JEP has clearly reviewed the 2017 valuation.
Many of us agree that the JEP also went well beyond its remit by proposing revised contribution rates without even running the kinds of checks that Marsh and others have employed. Marsh may have missed the JEP deadline, but why didn’t this group of experts at the JEP themselves ask USS for this information? It would also be worth examining why the employers and their vastly remunerated consultants and experts, didn’t ask the questions Marsh did before moving to radically alter the Scheme.
To support contributions increases — which some have arrogantly dismissed as relatively small in phase 1 — without engaging in such due diligence is hugely irresponsible, particularly to those on straitened wages. (Note also that issues like underpayments for example won’t naturally be picked up in phase 2 of the JEP as some have suggested, as phase 2 is focussed on the future.)
What is also galling is that the JEP report acknowledged over 50 contributions but does not tell us what these were, which ones it has taken into account, and which weren’t and why. The largest employers are said to have made a submission to the JEP. It is not clear what weighting was given to this for example. Throughout the summer, and as someone who read the reports after each JEP meeting closely, I can confirm my disappointment that their attempts at providing us with post-meeting updates hid more than they revealed. The contents of the Chair’s reports to me seemed to provide lip-service to the fundamental principles of transparency and openness that were required of the JEP and I trust this will be addressed in the next phase.
As of the last meeting of the NDC, the JEP has also not confirmed to UCU its own log of conflicts of interest as specified in its own terms of reference. It would be good to know that UCU and UUK have kept this under scrutiny (and by whom) and what actions have been taken to manage conflicts, given that the quorum of the JEP if I have understood this correctly is all its members, and therefore it appears that conflicted members cannot easily be recused for conflicts of interest.
For many of the reasons cited above, while NDC welcome the JEPs findings on certain issues and are glad for their findings, we do not at this stage endorse the JEP phase 1 report.
We have also made it clear that we do not wish for members to pay increased contributions based on a flawed application of Test 1. Talking about Test 1, what is surprising and disappointing even today is that in the past week, it came to my attention through a whistleblower that the SWG have had access to a First Actuarial report provided on 30th October 2018, confirming Marsh’s analysis. That this has not yet been summarised to members or indeed the substance of the report made available to members is a great worry to me. There is indeed much to be concerned about this unwillingness to share crucial independent verification information, particularly when it is supporting our case. Thanks to an anonymous whistleblower and our persistence, NDC finally received a copy of that report last night and you can be assured NDC will be considering the report very carefully at our next meeting. As always, we will openly report our minutes to you. Our review of the Marsh analysis (published before receiving this First Actuarial report) and the preliminary review of this report in the few hours before this meeting, show that there is no reason for NDC or the union to alter its No Detriment position.
NDC are clear that we will not countenance a clever fudge — the arguments of straitened circumstances arising from employer profligacy followed by their crying wolf in terms of financial hardship while senior managers continue to draw disproportionately large salaries and casualise our colleagues, are not new to us. Employers have played a long game to destroy DB pensions (see the employer responses to previous UUK consultations, particularly with regard to risk appetite and this is clear). Employers have also made visible and unjustifiable choices to take on large financial commitments to loans, to consultancy projects, to shiny new buildings and to overseas campuses for example.
We are also aware that the debunking of Test 1 and the findings of the JEP and the new First Actuarial report mean nothing if the usual suspects alone get to drive through their agenda and continue to be complicit with the ignorance, negligence, conflicts of interest and maladministration that have destroyed final salary, imposed a salary cap for DB and now seek to destroy DB on spurious grounds. As mentioned earlier there are still clear signals that although for example the JEP report and Marsh analysis are in the public domain, many employers are barely acknowledging leave alone engaging with their findings. This cannot be permitted to continue.
We are concerned about internal decision-making here at various levels in the UCU — not only was the new First Actuarial paper not shared with NDC until it was exposed by a whistleblower (and we then asked) but also the next JNC meeting scheduled for this week was cancelled by Chair’s decision on the grounds of no-business-to-transact despite disagreement within the SWG about this. This is particularly worrying because the messages from this SHESC and from the NDC as a response to this SHESC will not be communicated formally by our negotiating team to the other negotiating parties until the 29th and we believe that employers and USS should be made well-aware of the “depth of feeling” before they again profess ignorance to it.
In this context, we feel it is vitally important that the NDC’s democratic voice is heard clearly. As some of you know, subsequent to our deliberations, NDC had passed 2 motions. These were due to be brought to SHESC via HEC (Higher Education Committee) because, until the rules are altered at the next Congress, the NDC are unable directly to bring motions to you the very SHESC who have set us up. We have been informed that although HEC intended for us to bring both our motions to this conference, there appears to have been a slip — as Alan and others have explained — in what was communicated to CBC (Congress Business Committee) by the HEC chair. The motions live on, thanks to their inclusion as emergency motions with the support of 10 branches, and also helpfully in the amendment to the Liverpool motion which carries our motion within it. We trust you will agree with and support these NDC motions.
NDC will continue to act in an open and transparent way. Our minutes are publicly available through a dedicated section of the UCU website as is the NDC note providing direction to SWG. We will also welcome members’ contributions to us through our shared email box which will soon be made available on the NDC page.
We trust that SWG and our negotiators will feel the same way about the spirit of the dialogue as espoused by NDC and will join us in working towards an open, honest and accountable UCU that saves DB pensions.
Since the upload of NDC materials seems to take time, if you would like to be on our mailing list please contact me via my personal email at deepa.g@btopenworld.com or Twitter (@deepa_driver) or say hello in the break. Thank you.
This speech is typed-up from my handwritten notes and I have included links to some of the underlying documents that I used while preparing the speech. Due to the number of interruptions from the top table, I am not 100% sure I made these points exactly in the sequence above, but hopefully you will get the gist.
