Save university pensions, and save the planet

by Dr Neil Davies, Dr Ewan McGaughey, and many more

Save university pensions, and save the planet

by Dr Neil Davies, Dr Ewan McGaughey, and many more
Dr Neil Davies, Dr Ewan McGaughey, and many more
Case Owner
This is a joint effort from many university branches: we believe in fair pensions and a living planet. Its organising group includes Dr Neil Davies, Bristol UCU, and Dr Ewan McGaughey, KCL UCU
111
days to go
£332,070
pledged of £570,000 stretch target from 7,956 pledges
Pledge now
Dr Neil Davies, Dr Ewan McGaughey, and many more
Case Owner
This is a joint effort from many university branches: we believe in fair pensions and a living planet. Its organising group includes Dr Neil Davies, Bristol UCU, and Dr Ewan McGaughey, KCL UCU
Pledge now

This case is raising funds for its stretch target. Your pledge will be collected within the next 24-48 hours (and it only takes two minutes to pledge!)

Latest: Nov. 8, 2022

"Real prospect of success" in Court of Appeal!

We have just got leave to go to the Court of Appeal - please donate! By the threshold test that gave us the right to appeal, this means that we have a "real prospect of success" in our clai…

Read more

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.

The problem

We are now in our third massive strike 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 £89.6bn by August 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. 

The solution

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, 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 £89.6bn by August 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) 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 this USS pension cuts 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 needed to raise approximately £50,000 for the initial stage of the claim, which we won, and are currently raising sums to cover the potential costs of the second hearing. This is to get permission for USS Ltd to 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. 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, and take all necessary steps against university managers and the Pensions Regulator to achieve these objectives. We know that if we stand together, we can have a good system of social security for everyone, and a university sector based on the principles of democracy, equality, security, sustainability and justice.

Update 4

Dr Neil Davies, Dr Ewan McGaughey, and many more

Nov. 8, 2022

"Real prospect of success" in Court of Appeal!

We have just got leave to go to the Court of Appeal - please donate! By the threshold test that gave us the right to appeal, this means that we have a "real prospect of success" in our claims to:

  • go to trial against the directors for their breaches of duty, with the costs paid by USS;

  • reverse the April 2022 cuts, based on the nonsense valuation saying pension assets would grow by 0.0% above inflation for 30 years when they actually grew 30% in 2 years;    

  • prevent the discriminatory impact of the pension cuts that fall hardest on women, minorities and young people;

  • reverse the staggering cost inflation driven by USS managers whose performance has failed;

  • make the USS fund divest fossil fuels, because they are a “risk of significant financial detriment”, and members have said they do not want investments that burn the planet.

We have already established the precedent in the High Court that beneficiaries of a pension corporation - like the thousands of donors in this case - have the right to bring proceedings. We did not win the right to go to trial yet, based on an outdated interpretation of the “rule in Foss v Harbottle” (a case decided 10 years before Charles Dickens’ Bleak House). In the Court of Appeal we are arguing that directors have duties under the law in the Companies Act 2006. Those duties are passed by Parliament and they must be enforceable. They include acting for proper purposes in providing pension benefits, acting within the law, not violating the duty of non-discrimination, not inflating costs as performance plummets, and not risking significant financial detriment by staying invested in fossil fuels.

So please donate generously and share! As COP27 begins, it’s never been more urgent for our planet to end fossil fuels. Gas, oil and coal are volatile, risky, and dangerous assets that form no part of the future. The overall mismanagement of university pensions must end completely. We don't want a fund run by the priorities of ex-fossil fuellers and asset managers that fail to perform. We need a democratic fund that follows the priorities of its beneficiaries, for a good pension and a living planet.



Update 3

Dr Neil Davies, Dr Ewan McGaughey, and many more

June 1, 2022

We're appealing - help us hold the USS directors accountable!

We are so grateful for everyone who's supported us so far - many thought that we would not even get to this stage: the High Court has ruled that beneficiaries of a pension corporation can sue directors for breach of duty. However, the High Court failed to give us permission yet to go to trial, based on a wrong reading of the law, and the wrong understanding of the law's purpose.

So, we’re appealing! Please help us finance, and publicise this case. Because the pension cuts were wrong. They are discriminatory. USS must stop wasting money. USS must divest fossil fuels: they're costing the Earth. 

What did the High Court judgment say? First, it said that we can bring a derivative claim. This is no small precedent. But the judge, Leech J, got the rest of the law so, so wrong: 

  • he made statutory directors duties impossible to enforce with technicalities dating back to the rule in Foss v Harbottle from 1843, destroying the fundamental principle that ‘if a statute gives a right, the common law will give remedy to maintain it’;

  • he invented a hurdle of showing ‘reflective loss’ that has no application to derivative claims, at [30]; 

  • he said the only breaches of duty that could have a remedy are those that give directors some ‘personal benefit’, [43]; 

  • he got the law on discrimination wrong, and said there was no evidence of particular disadvantage from the cuts to women, young people and minorities [166] when USS itself accepted that there was, e.g. at [96];

  • he got the law on fossil fuel divestment flat wrong, missing the key test of the ‘significant risk of financial detriment’ from fossil fuels, at [193]-[197] and ignoring the empirical evidence, including from Imperial College Business School on how fossil fuels have been terrible investments for over a decade;  

  • he failed to engage with the basic submission that the valuation assumption of 0.0% growth above CPI inflation is and always was nonsense, and wholly improper, and the evidence of Prof Raghavendra Rau that USS would – even on the worst historical returns – have a £30bn surplus.

The full judgment is here. As Leech J admits, it's ‘lengthy’. To be fair, he was swamped by over 1000 pages of documents from USS lawyers. This bordered on an abuse of process, in trying to concoct a mini-trial, and bankrupt the claimants, instead of confronting the law and the directors' improper conduct.

We’ve already seen change because the failed "CEO" Bill Galvin – coincidentally after we said we’d look to appeal – was telling universities on Monday, 30 May 2022, maybe they could reverse the cuts. Not only should the USS directors reverse the cuts, they need to be completely overhauled - rooting out the asset managers that want to destroy the pension, who don't care about discrimination, and who fail to divest fossil fuels that are burning holes through retirement security and the planet. We are determined to bring real change to USS, because they have been acting in their own interests, not ours. The law says they must.

Thank you so much for all your support, and what you do every day to keep our university sector going. You deserve fair pay and pensions, democracy at work, and equality. We are confident, we are organised, the law is on our side, and if we stick together, we will appeal and win.

Update 2

Dr Neil Davies, Dr Ewan McGaughey, and many more

March 9, 2022

We won round 1! Share and donate again!

We have an incredible update: on 28 February we won our first court hearing in our case. The High Court ruled that we have a prima facie case, and that the claimants - whose action was only possible with your donations and support - are acting in good faith. Now we need your help - to share, and donate more - for the next hearing!


Our barrister, David Grant (to be appointed QC on 21 March) and the team at Outer Temple Chambers has done a stellar job, and we are getting an urgent new hearing that can stop the pension cuts on 1st of April. Our hearing is planned for 28 March. But we need your help again for the next step to cover our costs. The average pledge is £36: and this compares to the £100,000s that a typical colleague will lose if the pension cuts go through in retirement (find your cut here), or the £1000s that we stand to lose in deducted wages now. Please donate £50, or £20, or whatever you can, and share today!


Because we can stop this madness, reform, and have a better pension for the future and our planet, if everyone works together! We can:

  • reverse the nonsense valuation: there's over £30 billion in surpluses, even if we went through an era of depression, not a deficit;
  • stop the discriminatory cuts: we know the cuts fall hardest on women, young people and minorities, and it's wrong;
  • reverse the self-enriching cost inflation at USS, which went from £38m in total operating costs in 2007 to £160m in 2020, squandering your money - the "CEO" Galvin took £291,000 in 2013, and has failed so much and proposed so many cuts he took £756,000 in 2020 from your money;
  • divest fossil fuels, as members called for in the November 2020 ethical investment survey - the failure of USS to do so just cost us £500,000,000 in write-offs from Russia's appalling invasion, and all because the failed USS chair and directors had careers in coal and fossil fueled banks.


We call on USS to immediately halt their vicious, wanton cuts to university pensions, cut their super-inflated costs, and divest completely and immediately from fossil fuels that bankroll authoritarian politicians the world over. We need instead to have democratic governance reform, and a shareholder investment and voting policy for USS assets that follows the environmental, social and governance values of members. They must halt the cuts until we have a full and fair hearing in open court about the harm they have caused. We are determined to bring personal responsibility to the directors for the damage they've wrought. Their time is almost up - they need to do the right thing. 


Please share and donate today, because we can win! 

Update 1

Dr Neil Davies, Dr Ewan McGaughey, and many more

Oct. 30, 2021

We've issued proceedings against the USS directors

On Friday, 29 October, we issued proceedings in the High Court, and served notice at the offices of the USS directors. 


Just as we've promised, and with a total failure to adopt any meaningful change from the USS shadow director or "CEO", Bill Galvin, and the board of directors of USS Ltd as whole, we've launched a derivative claim against them. This is the first time they have ever faced the prospect of personal accountability for the damage they have caused, and we are going to use the law to its fullest extent. 


Our action is to apply to sue them in the name of the company on behalf of all members of the pension. The four claims are:

  • that the valuation of the pension in a stock market crash, and its methodology, is a breach of duty: it's at least a misuse of directors' powers, and failing to take into account relevant considerations of the assets' recovery;
  • that the proposed cuts amount to unlawful discrimination, particularly as they hit women, ethnic minorities and young people the most;
  • that the directors have driven a super-inflation in asset manager and total operating costs at USS in a way that serves themselves, not the company - instead of proposing to cut the pension, they should cut their costs;
  • that failing to divest fossil fuels has caused, and will continue to cause significant financial detriment, and is against the interests of the beneficiaries.


Now the claims will be reviewed in the High Court. We hope for a swift granting of permission to proceed to a trial. Please share the news, and let's change our pension scheme for good!

    There are no public comments on this case page.