Demonstration: Unions’ statement refusing pensions changes

ON FRIDAY 20th June, trade unions demonstrated over the proposed changes to the staff pension scheme at Aberystwyth University. A ballot taken by the unions showed majority were in favour of strike action during Freshers week on the 22nd of September, however a further ballot will be taken to determine this, following negotiations.

The unions have released the following statement which sheds light on their refusal to accept these changes and the extent to which the changes proposed would make lowest paid staff members significantly worse off.

Union Logos

At the meeting of Friday 20th June, Aberystwyth University’s Council decided to impose changes to the support staff pension scheme (AUPAS) despite strong objections raised by all the trade unions involved and individual staff members. This decision makes Aberystwyth University the first university in the UK to close a Defined Benefit pension scheme to all existing staff members as well as new members and force them to join a Defined Contribution scheme, or opt-out altogether.

The University’s planned changes to pension arrangements would lead to a large number of the workforce, including many low paid workers, being significantly worse off during retirement. According to the University’s own pension calculator, some members can expect their pensions to be reduced by as much as 50%. For example, Jan, Grade 1, joined AUPAS in January 2001: most of her contributions will go into the new DC pension scheme if the proposals go ahead until her retirement in August 2033. She will receive a pension of £2,000 per annum instead of the expected AUPAS pension of £4,000.

The changes will create a two-tier system of pension provision in the university, with mainly higher paid staff continuing to enjoy a Defined Benefit, final salary pension scheme while lower paid staff, the very people whom the university should be protecting from a cut on this scale, will have to shoulder all the risks inherent in a Defined Contribution scheme while suffering a substantial loss in expected income in their retirement.

We do not accept the Council’s view that AUPAS is unaffordable or risk-laden; the scheme has a clear 10-year deficit recovery plan, which is demonstrably working. The scheme’s deficit has shrunk from 16.6 million to 12.8 million in 2 years, and although the scheme is still in deficit, it does not warrant the action taken by Council given the impact that these changes will have on low-paid staff.

At a meeting between members of the Council and trade union representatives, the Council President argued that this is not a cost cutting exercise; but given that the employer’s contribution (10%) to the new DC pension scheme is a significant reduction compared to AU’s current contribution rate to AUPAS (13.65%), it is impossible to view it in any other light. We believe that the support staff pension scheme is an unfair target for such a cut, particularly when you consider that providing an adequate pension for the lowest paid staff in the university only accounts for 2.3% of the University’s overall budget, according to the University’s financial statements for July 2013.

As a consequence of the Council’s decision to close AUPAS on 31st March 2015, and following the result of an indicative ballot on 13th June that demonstrated overwhelming support of 90% and above from our members, the trade unions have resolved to conduct a formal strike ballot with a view to taking industrial action during the first week of Semester 1 in the 2014/15 session.

We are prepared to discuss issues surrounding the procurement of a new DC scheme vehicle and provider with the university; however our engagement in such discussions does not alter our position, that we are opposed to the closure of AUPAS under the terms expressed in the Council’s resolution.

The unions have compiled the following graph depicting how the changes would affect staff, using volunteered members’ data  and the university pension calculator. It is based on average salary grades 1-7 = £22,500, age 25 retiring at age 65 (40 yrs service), low pay increase (1.5% per annum), and low growth (5% per annum).

The university provided a revised offer of 10% (up from 7.5%), however as the figures show, it is not much of an improvement to the outcome, with the figures for a Grade 1 average salary still losing up to 51%.

pension graph

Simon Dunn, UNISON regional organiser, said:   “Industrial action is always a last resort, but the university’s proposals are condemning workers to a poverty pension.

“Some of the lower paid workers are going to lose thousands of pounds a year during retirement as a result of these plans.

“Our members have clearly stated its time for the University to wake up, accept the proposed cuts are too much to bear, and sit down with the Unions to negotiate an alternative.”

Martin Wilding, UCU Aberystwyth branch, added: “The pension proposals are unfair – it’s as simple as that. They leave the low paid significantly worse off, whilst those at the top will have a decent pension.

“Is this really the image that the university wants to portray? If this goes ahead, it will not make the university a better place to work, nor will it make it a better place to study.

“In the face of falling student numbers and reputation, the University needs to be pulling together to make Aberystwyth a top place to study, and a top place to work.  The answer cannot be to say to half of your staff, we don’t think you deserve a decent pension.”

Allan Card, UNITE organiser, said:  “Low paid university workers should not be expected to pick up the tab for the university’s financial difficulties, particularly as those at the top are benefitting through performance related pay.

“Hopefully, commonsense will prevail and we won’t have to take formal strike action, but if we have to we will because we genuinely can’t afford not to.

“The University have refused to negotiate changes to the current pension scheme, and will only talk about what happens after it closes.  Our members don’t want to strike, they don’t want to disrupt students’ study and cause more bad publicity for the University,  but have shown in this indicative ballot that they see this as the only way to stop these massive cuts to their pay package.”

Aberystwyth University has been asked to comment.