Why have we fallen out so badly over the Universities Superannuation Scheme pension?
We seem to be in a position that isn’t going to get better in the current industrial action called by the University and College Union in righteous defence of the current USS pension.
But why are the employers (represented by Universities UK) and the membership (represented by UCU) so far away from a negotiating position?
One of the reasons behind this, and something that I haven’t seen discussed, is within the corporate governance of the USS scheme.
To negotiate disputes there is a Joint Negotiating Committee (JNC) with equal numbers from UUK and UCU. When they vote against each other, as they tend to do, the casting vote is held by the independent chair Sir Andrew Cubie. The independent chair has had to make a decision on such matters twice in five years, and both times has cast his vote to support the viewpoint of UUK.
As an aside, and viewing this behaviour in its historical context, a previous chair Sir Kenneth Burrell (who held the role for 30 years) never used his casting vote.
This could be because of different circumstances and a lack of contention but also perhaps good chairing can lead sides to find a compromise without the need to draw the deciding vote. Things have changed.
To be transparent, I am not a member of UCU, nor have I ever been, and I am not on strike.
However, the flaw as I see it is in the design of the JNC, which is set up not to negotiate. If you have even numbers from both sides, the positions become ossified and thus the chair has to go one way or the other, and the opposing side will be upset as a result.
What we have is the employers’ representative group UUK, which will always back a position based on the self-interest of the group (what else would they do), and then the UCU, which (naturally) takes the opposite position on behalf of the workers, the members. Thus negotiation is not something that will come easily in this typology of industrial relations.
I imagine that you could do some fancy game theory on the possible outcomes and the results would find little or no probability of a negotiated solution – all outcomes will be referred to the chair and then decided in favour of one vested interest.
One of the problems of the so-called JNC is that it does not represent the membership of USS. USS members and the UCU are not mutually inclusive. Recent figures at the University of Reading indicated that about 25 per cent of qualifying USS staff are members of UCU (I can’t find national figures but they are likely to be higher than this, although certainly not a majority). It could be argued, therefore, that the UCU probably reflects the views of only a specific segment of the workforce and is not a representative cross-section.
A simple way forward out of this impasse is therefore to modify the membership of the JNC, reconstitute it to be actually representative of its stakeholders and set up another meeting to consider the positions set out by the employers and the membership.
UCU can have a number of members proportionate to reality, and UUK can keep a couple of seats. The rest can be made up of independent trustees, with experience in pension funds.
I think that the majority of members (who are not members of UCU) would be much happier to be represented like this, the probability of an actual negotiated outcome would be much higher, and we would all be spared industrial action.
Adrian Bell is a professor of the history of finance at Henley Business School at the University of Reading, where he is also head of school at the International Capital Market Association (ICMA) Centre
