Save university pensions, and save the planet
Save university pensions, and save the planet
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We need to save the university pension, and save the planet. This is a grassroots action by academic staff against the trustees and managers of the Universities Superannuation Scheme for breach of their duties: for a third time they're threatening to cut university pensions with a flawed valuation, and a discriminatory plan. Instead of cutting their super-inflated asset manager costs, and divesting from fossil fuels, they are proposing to cut your pension. This must end. We need fair, equal, sustainable pensions for us, for the planet, and for the future.
There have been two massive strikes since 2018, because USS has proposed to close or cut the guaranteed income pension ('defined benefit') element of the scheme, and instead have a worse lump-sum pension ('defined contribution'). At the depth of the Covid-19 stock market crash on 30 March 2020 they "valued" the pension assets, and said there would be a "deficit" of £14.9 to 17.9 billion for the future. They're using this "valuation" to justify cuts. They are wrong because:
- we know that USS conducted its valuation on 30 March 2020, in the Covid-crash, that it assumed 0.0% asset growth for 30 years (even though the fund grew from £66.5bn to £85.3bn by June 2021), and USS managers appeared more worried about being asked "questions" by the Pensions Regulator than putting the interests of beneficiaries first;
- we know that since 2008 internal asset manager personnel costs at USS have inflated by a stunning 1318%, external adviser costs have tripled, and embedded asset manager fees have been inflating. Reversing these costs would raise at least another £100 million every year. But instead of controlling their costs (which is taking your pension money) the asset managers want to cut your pension benefits;
- we know that women live longer than men, so if everyone gets a lump sum (DC) pension, instead of an income guaranteed for life (DB), this will mean pensions are more likely to run out for women - on top of the existing 'gender pension gap'. Alternatively, if contributions rise, this will discourage the lowest paid to join the pension, and this will also have a discriminatory impact. USS has published no gender impact or other equality assessment;
- we know that in November 2020, USS conducted a survey of members' views on divesting from fossil fuels, and found a large majority of members were in favour. Fossil fuels are financially the worst performing assets, and they are burning our planet. But instead of divesting, the USS trustees and managers have failed to even publish the report. On the USS board are 5 trustees appointed solely by the existing board, and they come from JP Morgan, Citibank, HSBC and coal.
The USS trustees and managers haven't acted in our interests. They're not going to. So we need to take action.
We need a democratic pension fund, and we must compel our trustees and managers to act in our interests by law, because it's our money, not theirs.
We are crowdfunding to bring claims against the USS trustees and managers for:
- (1) failure to act within their powers and negligence, in maintaining the 30 March 2020 Covid-crash valuation date for predicted pension assets, and in assuming 0.0% asset growth above inflation for 30 years, even though the fund grew from £66.5bn to £85.3bn by June 2021;
- (2) self-serving negligence, by inflating internal asset manager personnel costs by 1318% since 2008, and tripling external adviser costs, and inflating embedded fund manager costs, but proposing to cut beneficiaries' pensions (not USS costs) to respond to the so called "deficit";
- (3) discrimination, by proposing to cut the defined benefit pension, or raise contributions, and ignoring the disproportionately negative gender and other equality impacts;
- (4) negligence and failure to act in beneficiaries' best interests, by not divesting from fossil fuels, even though these are causing significant financial detriment: coal, oil and gas are the worst performing asset class, they are destroying the ecosphere, and the beneficiaries of USS have said they want to divest. If we get out of fossil fuels, our pension will not face massive climate risks from bankrupt fossil fuels, it will be healthier, and so will our planet.
What can we do?
Please contribute generously! Please ask everyone you know to do the same. Tweet, email, blog, and together we'll hold the asset managers to account. You can see what we stand to lose on current proposals by putting your salary into the UCU pension proposal modeller. Compared to the losses we face, a contribution to this action is a drop in the ocean. If we all chip in, we can help save university pensions, and the planet.
We need to raise approximately £50,000 for the initial stage of the claim. This will include an application to court to make USS Ltd pay for the cost of a "derivative claim". This means we derive the right to sue the trustee directors and managers for their wrongs to us all in the name of the pension fund corporation. There will then be either an order granting the derivative claim and an indemnity for costs, or a further round of fundraising to press the case forward. We are going to shine a very bright torch on the trustee directors and managers, and hold them to account to the law's full extent for the damage to the pension scheme and to UK higher education. We are going to settle our pension system for good, so that we never need to have a dispute about this again.
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