Members of the University and College Union (UCU) have overwhelmingly backed an offer that will reverse cuts to their pensions, bringing an end to a five-year long dispute involving 69 days of strike action.
Ninety-nine per cent of 19,000 members who took part in a consultation have opted to support the deal, which UCU said will result in an average member of the Universities Superannuation Scheme (USS) being between £150,000 and £200,000 better off through paying lower contributions across their working lives and enjoying better benefits in retirement.
The union has led a long and sometimes bitter campaign in opposition to pension cuts that were eventually voted through in April 2022 following a valuation in 2020 that projected the scheme had a deficit of £14 billion.
A dramatic turnaround in fortunes in the financial performance of USS, in part because of rising interest rates, transformed this projected deficit into a £7 billion surplus and paved the way for the cuts to be cancelled.
UCU and Universities UK – the body that represents USS employers – are now expected to finalise an agreement at the Joint Negotiating Committee later this month, having received support from both sides.
Once ratified, contribution rates are expected to fall for both staff and employers from the current 31.4 per cent to 20.6 per cent, split between 14.5 per cent from employers and 6.1 per cent from staff.
This change is due to take place in April 2024, although UUK and UCU have both suggested that the changes should be made sooner, potentially as early as January.
Other changes are set to include an increased threshold for the money that can be paid into the more lucrative defined benefit part of the scheme, up from £40,000 to about £70,000, where it would be if the cuts had not been implemented.
A 2.5 per cent yearly cap on pension increases has also been removed, allowing pension pots to better keep up with the rate of inflation.
Members who may have lost out during the two years the cuts were in place are due to be compensated via a £900 million fund.
UCU general secretary Jo Grady called it a “momentous day, not just for our members, but for workers everywhere”.
“For years, our members were told that what they were demanding on pensions was impossible,” she said, adding that the union had disproven vice-chancellors and pensions experts who said the campaign was a “lost cause”.
While the agreement brings to an end the pensions dispute at UK universities, UCU is still embroiled in a larger pay and conditions dispute that shows little sign of being resolved.
The union is currently balloting members on whether to take further strike action in pursuit of higher wages and action on workload and precarious contracts.
“We won’t stop here,” Dr Grady said. “The same dedication that fuelled this pension fight is felt just as intensely when it comes to pay, workloads and job security. We will not stop until we create a higher education sector that properly values all its staff.”
