A tale as old as time

It’s a tale as old as time: managers would like to pay workers less.

The proposed changes to University staff pensions are disadvantageous compared to the current arrangements in two ways:

  1. staff will receive less income in retirement
  2. staff will now carry the risk associated with the investments (defined contributions DC) – these risks are currently carried by the employers (defined benefits, DB).

University managers, represented by UUK, have presented the changes as necessary in order to make the pension scheme sustainable into the future. There are reasons to be sceptical:

  1. in secret discussions UUK members have discussed other motivations:
    • the desire to cut staff costs
    • concerns about competition and borrowing – shared pension liabilities are affecting the credit which different institutions can access
  2. the concept that the current scheme is unsustainable is based on a very conservative valuation and a set of tests that is unrealistic for a multi-employer scheme. 
  3. the members of UUK seem divided about their ‘risk appetite’ and willingness to pay greater contributions. It appears that UUK is not accurately representing a consensus view.

It’s not difficult to see that today’s university managers, with their focus on finance and growth at the expense of teaching, learning and research, are likely to be attracted to changes to the pension scheme that will leave them with more money to spend as they wish, and they some of them would also like to gain an advantage over their ‘competitors’. In order to achieve this outcome though, they would need to make the current scheme appear unworkable. Fortunately, from their perspective, they are able to do this merely by expressing an opinion about their appetite for risk.

So that is what seems to have happened. Managers would like to pay workers less, and have found a way to do it. The trick is to sabotage pensions rather than cut wages – it’s in the future so people are less worried about it, and the sabotage element makes it harder to see who’s responsible. But once you see it, it’s impossible to unsee.


Some useful refs:



http://www.universitiesuk.ac.uk/policy-and-analysis/reports/Documents/2016/uss-mutuality-flexibility-of-pension-cost-and-provision.pdf (also downloaded on Mac)



Rise of the McUniversity

Since 5th March I have been participating in UCU Industrial Action – a strike over UK academics’ pensions. It’s impossible to overlook the causes of the strike, a failure of leadership that runs much deeper than the current dispute.

Universities are being ‘led’ or at least ‘managed’ by people (Vice-Chancellors, Provosts etc.) who, on the whole have accepted the marketisation of higher education. Let’s try to look at the world from their perspective.

They see themselves as leading competing businesses.

A large part of their income comes from student fees. In 2015 the admissions cap was removed. Unless universities recruited as many students as possible, there was a real danger that someone else would take their share of the market, with less resources they would compete less effectively and eventually go bust. Realising this, university managers decided that they each needed to increase their market share – in order, at least, to be more resilient to the competition. To do this, they felt they had to expand student numbers which generally meant building new facilities. In order to do this they borrowed (and are borrowing) as much money as they could, and they cut (and are cutting) other costs as much as possible.

Most of their costs are staff salaries and pensions, and a good way to cut costs (while expanding) is to employ a greater proportion of young and relatively inexperienced teachers and researchers on low salaries, fixed-term and zero-hour contracts. As well as being paid less, they can be dispensed with (if recruitment targets are not met, for example) without incurring redundancy costs and in some cases they do not qualify for pensions (another cost saving). Note that these priorities are driven by market forces and do not relate to the quality of teaching or research; to the extent they are in conflict, the student experience and research excellence inevitably suffers. Real leadership would involve working with government and other institutions to prioritise excellence in teaching and research over competition and market share, but this kind of leadership has been very rare.

Brilliant young academics are making huge contributions to the country’s research and teaching – but they deserve decent salaries, job security, pensions and they deserve fulfilling jobs where they can use their exceptional talents to create and share the new ideas we’ll need for the rest of the 21st century, rather than being treated as dispensible, temporary ‘human resources’.

The current strike is a symptom of the underlying issue – marketisation – and as in any serious illness, it would be dangerous and foolhardy to treat the short-term symptoms without investigating and remedying the underlying disease. It is exactly the same cause that led to the introduction of student tuition fees, the increase in those fees, the cuts to student maintenance grants. The vast majority of academics, those who actually teach students and carry out research at universities, opposed these things because in the end, we want to be a part of a higher education system that is open to everyone and completely focussed on world-class teaching, learning, knowledge and discovery.

Universities are not businesses – they are communities of students, teachers, scholars, researchers, and the vitally important administrators, librarians, technicians and others that make learning and research possible. We’re all being let down by our so-called ‘leaders’.