The USS and TPS pensions are not just guaranteed retirement income. They bind our sectors together. By forcing all employers to make the same payments for the same pension promises, they act as brakes on further marketisation and the stratification of our workforce, and they discourage institutions from over-leveraging themselves with debt to the detriment of students and staff. Employers did not try to end the USS pension guarantee because they could not afford to pay for it – they could, and still can. They tried to end it because they wanted to extend and intensify the Conservative Party’s failed market experiment, whereby poor employers have suffered, already-rich institutions have expanded uncontrollably, and the sector has played its staff off against each other. They wanted to end their obligations to each other and to their employees.
8.1 National coordination to protect TPS institutions
Managers are now bringing the same destructive market logic to bear on TPS institutions. The government’s valuation methods demand a 7% increase in employer contributions to provide the same benefits as before, with no possibility of cutting benefits. FE colleges are fortunately protected, for now, but post-92 universities are not. Individual post-92 employers will try to manufacture a sense of crisis, arguing that their institutions urgently need to make significant cuts, including redundancies, in order to afford these increases. As the USS dispute demonstrated, we cannot take them at their word. Even poorer employers are running surpluses, and sitting on substantial unrestricted reserves that will allow them to soak up the cost of TPS over several years while reconsidering their business model in a way that minimises the impact on staff. And we must not forget that the TPS increases are not set in stone. They are tied to economic growth, and a recovery will make this a temporary crisis rather than an irreversible one. Employers can weather the storm.
There is no need to wait for any working group or joint panel to confirm this for us. We need a coordinated national campaign, learning from USS, to get the message out as early and clearly as possible that the TPS contribution increases do not justify immediate cuts to staff costs.
8.2 Securing the future of USS
We must not forget that the future of USS is still far from secure. Members won an extraordinary victory in April 2018 by forcing employers to withdraw their proposal to abolish guaranteed pensions for members. The courage and conviction of striking branches to come together to reject a deal agreed by our own General Secretary, which would have involved massive cuts to benefits in order to preserve a small guaranteed element, has been rewarded – for now. The first report of the Joint Expert Panel shows that USS benefits can be maintained as they are, with no need for contribution increases above the rate we were paying before the strike. But experience shows that we cannot trust USS’s managers to respect an expert consensus. When the Panel issues its second report, dealing with the longer-term future of the Scheme, there needs to be a full and frank reckoning. Our employers could work with us to overhaul USS’s governance and widely discredited valuation methodology, if they wanted to. They could even help us to transform USS into an ethically invested, socially responsible scheme that combats, rather than accelerates, climate change, and expands its membership to include lower-paid and casualised staff. If elected, I will do whatever it takes not only to secure USS, but also to reform and improve it.