Academic pensions may seem like a niche interest. But, argues Dr Rowan Cerys Tomlinson, proposals to change the current pension scheme represent an assault on the entire sector
I became an academic for many reasons: because of my intellectual curiosity, because I wanted to contribute to society by teaching, because academia offered the heady mixture of solitary writing and intense socialization on which I thrive. I did not enter academia because of its promise of a decent pension. Or so I thought until recently when I have found myself waking at 4am worrying about my old age.
CDBU is fighting vital battles on a number of fronts and has not so far made comment on the dramatic attack on academic pensions, which will see the guarantee of a ‘defined benefit’ pension swapped for the uncertainties of a ‘defined-contribution’ pension dependent on the market. To take my own example, and using a modeller based on the official Universities Superannuation Scheme (USS) valuation document, if I keep paying into my pension for the next 30 years then I am set to move from a pension worth £22,000 a year to one that might, if investments work out, be worth £10,000 a year. By comparison, a teacher, and all academics working in newer universities, who are part of the Teachers’ Pension Scheme, will receive a pension whose total value will be worth hundreds of thousands more. I should add that my situation, after working for some years, is not quite as bad as those younger academics just starting out now. And it will be harder still for those who were hoping to enter academia in the next few years, already lumbered with the full whack of tuition fees, suffering from reduced funding opportunities for postgraduate work, moving from pillar to post in temporary jobs, and now set to have no guaranteed pension.
Academics are being fobbed off with glib platitudes
This is not the place to enter into the nuances of arguments taking place between the University and College Union (UCU) and the USS negotiators and vice-chancellors who have made repeated, dubious claims about the impossibility of continuing a defined-benefit pension, only to throw in passing sops to the academic masses through pipe-dream promises of a return to that system if/when finances look healthier. The more hawkish vice-chancellors on the UUK Employers Pension Forum, whose no-discussions approach is so far winning out, have, in chorus with USS, used glib and vapid platitudes to try to fob off a community used to stripping bare and analysing language and supposed ‘facts’; they have also fed staff overly (and cynically) conservative estimates of the impact on pensions, citing estimates from insurance firm AON that ignore the role of longevity and divestment. There is, what’s more, a glaring inconsistency in the methods that underpin the claims made by USS and UUK about the proposals: forecasts about the proposed scheme are based on optimistic assumptions, while the evaluation of USS, which provides the excuse for the removal of any defined-benefit scheme, is based on wholly pessimistic assumptions: https://medium.com/@mikeotsuka/uuks-actuary-s-best-estimates-eliminate-the-uss-deficit-33dad2afc24b.
The shock and anger produced by this dishonest presentation of the situation has pushed academics to vote in unprecedented numbers to strike and to do so dramatically: we are readying ourselves to lose a large chunk of our monthly salary by refusing to work for 14 scheduled strike days across February and March. This was not an easy decision. Some colleagues told me that they have never voted to strike before and we naturally feel anxious and guilty about the effect that it will have on our students, whose interests, as a recent blogpost on this site confirmed, are precious to us. But removing our labour visibly and actively is the only way, we hope, to make the universities – and what a world we are in when the university means the management and not the academics! – listen to us. Happily, the National Union of Students has voted to support the strikes and we hope, through ‘teach-outs’ on strike days, to get the message across to students that we are acting not just for our but very much for their good and the good of future generations. The support of academics who have already retired, or are close to retirement, has also been vocal and I urge you to speak out on our behalf.
Not just about salaries
This isn’t the first battle that I have found myself in. I marched against tuition fees and then, when first working as an academic, found myself speaking at a No Confidence Vote at Oxford as a group of academics sought to temper the worst aspects of the move from final salary to a career-average pension. That battle looks like a luxury now as any guaranteed pension is removed and future retirees’ welfare is thrown to the market. This move also exposes previous reassurances as so many meretricious promises, if not downright lies. Tuition fees were introduced, we were told, so that universities would be placed on a permanently secure footing. Yet pensions must now be sacrificed, so the official communications from USS, Universities UK, and my own vice-chancellor and chief financial officer say, due to the ‘difficult circumstances’ that universities find themselves in, which leads to the need to make ‘difficult decisions about how to invest limited resources’; the pension system is, they say (with the favourite lexis of management speak), ‘simply not affordable going forward’, though this claim, it turns out, is simply not true: the USS valuation on which the attack on pensions is based is strongly disputed and there is much evidence that the academic pension pot is in a considerably healthier state than many others: in a given year it currently reaps more revenue than it pays out and has £60 billion in reserves according to UCU. Perhaps the ‘difficult circumstances’ that justify the attack also justify the bloated VC salaries on which the media has excitedly reported, though these headlines hide a whole series of iniquities in academic pay, from the inflated salaries of the management ranks who increasingly outnumber teachers and researchers to the continuing gender pay-gaps in the academe, not to mention the pitiful situation young, hourly-paid academics find themselves in, tied to nine-month contracts so that they cannot use the summer to make progress in the research that might allow them to escape this trap and secure a longer-term or even a tenured post.
This isn’t just about salaries, though. University towns and cities are filled with glossy billboards behind which lavish new buildings are being constructed, all with the promise of enhancing the ‘student experience’. Meanwhile, at my university there is now no staff canteen, the space given over to high-backed Mad-Men-style armchairs that populate what has become a ‘study hub’. How can universities claim not to be able to afford pensions and yet endlessly devise expensive expansion plans, spending freely and enthusiastically on sports centres or business centres while asserting that there are no funds to pay for the badly needed extra lectureships that could go some way to addressing the dramatic rise in students since the cap on numbers was lifted? The obsessively-sought ‘student satisfaction’ is not being met through paying academic staff properly, now or in retirement, but through the expansion of real estate whose charms, it is hoped, will distract the students from the fact that their lecturers are not only exhausted from meeting the demands of the Research Excellence Framework (REF) and the Teaching Excellence Framework (TEF) but anxious about their future. Is it any coincidence that not having pensions on the finance books will lower the cost of the massive borrowing needed to fund the new innovation hubs and student-experience venues?
Academic careers are already fragile
We can suspect the sincerity of the explanations for the supposed current crisis in USS. But the demolition of defined-benefit pensions also fails to recognize the particular character of the academic vocation. Those of us who choose to enter academia opt for what we might call a ‘front-loaded’ job, in the sense that the qualifications take a long time, during which we are likely to accrue debt, and many of us do not start earning until our late 20s, if we’re lucky. Compared to our peers, we’re in a kind of arrested development: we qualify later, which means we start paying NI contributions later, and even then we’re likely to occupy jobs whose security is fragile, making such important steps as getting a mortgage very difficult. The good pension package has until now represented a reward for these years of not earning, or of earning precariously, or of earning a salary that’s by national standards decent, certainly, but which isn’t enough to allow a young academic to rent in the extortionate housing market of many university cities, let alone to buy a place of her own. Removing this benefit would not only be detrimental to existing members but could well deter people from pursuing a career in academia. I have already learned of promising Phd students dropping out, or considering doing so, because of the removal of the decent, defined-benefit pension.
Academia is hardly a bastion of social mobility as it is. The risk of returning to the days when it was the prerogative or privilege of those from wealthier backgrounds, who can afford to pay tuition fees, to fund themselves through postgrad work, and not to worry overly about having a decent and secure pension, is all too real. The effect of this would be an impoverishment of the intellectual range and diversity of research produced by our universities and of the voices to whom generations of students would (and should) be exposed. Meanwhile, there have been whispers of some wealthier universities setting up their own pension consortia. This would only exacerbate the hierarchies, and iniquities, that are already an unfortunate characteristic of our university system.
In other words, pensions matter to the very future of our university system. And we must work together as an academic community, young, older, and retired, to save them.