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Corporate statements

Birkbeck response to University and College Union (UCU) branch letter on Universities Superannuation Scheme (USS) and the latest USS Finance Management Report (7 April 2022)

Birkbeck remains committed to the points stated in its joint statement with the University and College Union (UCU) of 21 February 2022 and in particular, the key call to action: to urge UCU, Universities UK (UUK), Universities Superannuation Scheme (USS) and the Pensions Regulator to work together to agree a valuation methodology which recognises the unique nature of the higher education sector and, once a revised valuation methodology has been agreed by all parties, that a new valuation is undertaken at the earliest opportunity.

Birkbeck welcomes the news that indicative funding position of the USS has improved in the most recent monitoring report as at 28 February 2022, however, the interim monitoring report is not, and cannot be used as, a substitute for a full actuarial valuation, which is what is required to change benefits, contributions, or both. 

The improved funding position has been calculated on the basis of the benefit changes that came into effect on 1 April 2022. A deficit would still be present in the event that changes to benefits and contributions had not been implemented. USS quote that a total contribution rate of around 45% would have been required, had the benefits changes not been enacted and without enhanced covenant support measures. We understand that USS verbally advised the Joint Negotiating Committee JNC that the required rate for previous benefits would still likely be well in excess of 40% of salary, even when assuming the covenant support measures were to be available.

A more detailed funding update has been requested from USS for the 31 March 2022 position, and further positive news at this point strengthens our joint argument for pushing for changes to the valuation approach and the earliest possible valuation.

Birkbeck is paying higher contributions for each member as legally required under the scheme and we would be undermining the position of members, if we did not make the required contributions. In our joint statement with UCU, we wanted to emphasise the need for a scheme that is affordable in terms of the total contribution rate for both staff and institutions. UCU chose not to follow that path. Equally, the proposal put by Jo Grady on behalf of UCU nationally, following the publication of the USS Financial Management Report, involved agreeing to immediate contribution increases, not decreases. That is, is the immediate adoption of the proposals we were not able to endorse on the grounds of affordability previously.

Russia’s invasion of Ukraine (4 March 2022)

  • Russia’s invasion of Ukraine will have affected many members of the Birkbeck Community and particularly those with close ties to Ukraine, Russia and neighbouring countries.
  • Our thoughts are with all members of the community who have been affected by the events and we want to express our support for you at this time.
  • We have and will continue to contact students and staff who are likely to have been most affected by the events because of their ties to Ukraine and Russia.
  • We are monitoring the situation and recommend that you follow Foreign, Commonwealth and Development Office advice, which currently advises against all travel to Ukraine and which also advises against travel to some regions of Russia.
  • As a University of Sanctuary, and a member of many global educational networks, we stand with students and scholars in Ukraine whose studies and research have been affected by the invasion. We believe that education should be supported to thrive, which it cannot in a country under attack and as such, we join organizations around the world, including in Russia, in condemning the invasion of Ukraine.

Professor David Latchman, Vice-Chancellor on the USS Pension Scheme (21 February 2022)

  • The USS pension scheme should be a source of pride to us all, as it once was – a scheme that meets the needs of staff and employers and which reflects the values and unique characteristics of our sector. It should be seen as a major positive benefit and not something that now divides us in dispute.
  • To get back to that position, all sides need to bring solutions to the table. In this spirit, we welcome the decision of UCU to bring proposals of their own forward. Although the current perilous financial position of the College means that it is not in a position to support the level of increased employer contribution rates that form part of the proposals, we have engaged with them positively and in good faith, working with our UCU colleagues.
  • The following joint Birkbeck UCU Branch Committee/College statement now reiterates and reflects the significant common ground between us and sets out a number of clear calls to action that we collectively believe will help resolve key issues and move forward to agreed solutions.
  • Joint statement from Birkbeck, University of London and the Birkbeck UCU Branch Committee
  • The College welcomes the decision of UCU to bring proposals of their own forward in relation to USS. The College recognises that these proposals represent a good faith attempt to move discussions forward toward a mutually acceptable solution. Equally, the Birkbeck UCU Branch Committee appreciate how the College has engaged with these proposals positively and in good faith, working with UCU colleagues to identify areas of agreement as well as those areas where more work is to be done.
  • We agree with the statements in the recent UCU proposal that all stakeholders must “work collaboratively … to secure the long-term stability and sustainability of the scheme through meaningful discussion and constructive dialogue” that seeks to create “a more collaborative environment in which to make progress in the exploration of the feasibility and promise of scheme design involving risk-sharing of benefits.”
  • Although the College is not able to agree to all the terms of the proposal, this joint statement reiterates and reflects the significant common ground between us, as well as our commitment to finding compromise agreement on this issue. It sets out a number of clear calls to action that we collectively believe will help resolve key issues and move forward to agreed solutions.
  • Birkbeck UCU Branch Committee and the College believe that agreement can be reached on sustainable contribution rates for both employers and staff which secure a good pension. We also believe that the USS trustee's current attitude to risk, and the regulatory framework that provides the context for this, requires an overly prudent approach to risk which makes it difficult to obtain good value for money.
  • We acknowledge that an escalating, ongoing situation of increasing contributions, and benefit reductions, is now putting the scheme at real risk; unattractive and unaffordable both to new and current members on the one hand and to employers on the other.
  • We therefore:
    • reiterate our joint commitment to a scheme that is intergenerationally fair, and which retains a strong defined benefit component, focussed particularly on providing more certainty and security for staff early in their careers and on lower salary levels in laying the financial foundations for their future
    • call upon UUK, UCU and USS to collectively agree a valuation methodology which recognises the unique nature of the higher education sector, and the employers who stand behind the scheme, which is discussed with and acceptable to the Pensions Regulator
    • encourage UUK, UCU and USS to meet with the Pensions Regulator to explore opportunities to work together to produce the best and strongest scheme possible within current pension regulations and to collectively work for changes to regulations where appropriate
    • request that once a revised valuation methodology has been agreed by all parties that a new valuation be undertaken at the earliest opportunity
    • ask UUK, UCU and USS to join forces and create a well-resourced working party to explore the feasibility of alternative approaches that will give long-term stability and viability to the USS pension scheme. We agree that aiming for a cap on contribution rates, conditional indexation, or alternative scheme design, could make it possible for USS to continue as a collective, mutual, multi-employer scheme with an ability to invest for the long term in growth-seeking assets
    • ask UUK, UCU and USS to explore appropriate methods for increasing the take-up of the scheme by lower-paid and junior staff, to ensure both inter-generational fairness and long-term viability.