Alumni Update from University Court March 2022
Updated on 31 March 2022
As a nominated member of the University Court and a member of the Graduates Association, Jane Marshall acts as an intermediary between graduates and the University Court.
“The year started with the annual public meeting, at which our Principal, Chair of Court and others sought to give a flavour of the University’s work. Despite some IT problems, the on-line format has enabled more people to participate. We will build on this in future years.
“The previous Update mentioned financial pressures and their potential impact on the future of employees’ pension arrangements. As noted, industrial action by members has taken place in protest at proposed changes and there has been critical publicity in the press. With further industrial action confirmed in relation to proposed changes to USS (see below) it is worth explaining the background in more detail.
“The University participates in two main pension schemes. The first, the University of Dundee Superannuation Scheme or UODSS, is for non-academic staff. It is a local scheme managed by a trustee board. Academic staff participate in a national scheme with other UK institutions-the Universities Superannuation Scheme or USS. Both are final salary or defined benefit schemes, which provide benefits principally based on members’ pensionable service and salary at or near retirement. Employers sponsoring such schemes bear an open-ended financial risk, and this together with complex regulation and increasing costs has led to the closure of most such schemes in the private sector. They remain common in the public sector, where the state provides a taxpayer backed guarantee. The University is not part of the public sector and does not enjoy a state guarantee: it must observe the funding and regulatory rules which apply to all other pension schemes. These are designed to increase member security, and broadly require schemes to hold assets which can support the benefits members have been promised. UODSS and USS both run very substantial deficits –the gap between the schemes’ resources and the cost of promised benefits – and additional contributions are needed to reduce these deficits from the past as well as to meet the increasing cost of future benefits. The extent of underfunded defined benefit provision poses a material risk to the University’s financial sustainability and potentially impacts other investments and activities the university may wish to undertake. It is against this background that proposals were made to reform UODSS and (at a national level in conjunction with other employers) USS. Unsurprisingly perhaps, the changes to both schemes have been opposed by members and campus unions on their behalf.
“At its meeting in person on 15 February, the Court considered the future of UODSS, following a presentation by union representatives and a period of discussion between unions and management. Court was conscious of its primary responsibility in safeguarding the financial viability of the University while also ensuring a dignified retirement for all staff. Given the financial challenges that the University faced, it decided that UODSS could not continue in its current form and endorsed a revised future defined benefit package, leaving past benefits unchanged and closing the scheme to new members. Budget savings elsewhere will have to be found to meet the cost. The proposal will be taken forward for consultation.
“At its meeting on 15 February, the Court endorsed the final draft of the ambitious University strategy for 2022-27 (for more details please see previous Update.) The focus will now turn to implementation of the main strategy and its component sub-strategies.”