The university association has called for more investment in employees after increasing the pension scheme

Britain’s university unions on Monday accused bosses of failing to invest in staff as the sector’s pension fund moved into extra months after massive retirement benefit cuts to thousands of members.

The intervention by the University and College Union comes ahead of a vote for industrial action next month, which is part of a long-running dispute over pay, pensions and working conditions.

UCU general secretary Joe Grady accused university chiefs of “hoarding billions of pounds in cash”, after the union published a financial analysis of 145 higher education institutions involved in the dispute.

It found that collectively their holdings of cash and liquid assets rose by £3.4bn in the 12 months to April 2021, while spending on staff rose by just £200mn. Combined revenue rose to £41.1 billion from £39.6 billion the previous year.

Grady accused the vice-chancellors of 145 institutions of “freezing staff salaries, cutting pensions and plunging thousands into hardship” and urged them to use some of the savings to improve pay and conditions.

The University and College Employers’ Association (UCEA), which represents vice-chancellors in pay disputes, said the total figure was “Mask[ed] A significant difference between [higher education] Institutions”, which differ greatly in their financial strength.

“Each institution has a legal duty to balance its books and the nationally negotiated pay rise must be affordable for all 145 institutions,” UCEA added in a statement. “Many . . . organizations are scrambling to avoid redundancies, and others are struggling to balance budgets to maintain staffing levels as this year’s pay increases go into the pockets of employees.”

Attempts by the union to increase pressure on employers were last week published by the University Superannuation Scheme (USS) which showed £1.8bn of savings in the sector’s £77bn pension fund – the first since 2008.

The rating, which moved the fund into surplus, came less than 18 months after, as global markets crashed in the early days of the coronavirus pandemic, the scheme, which has 500,000 members, identified a £14bn deficit.

The huge hole sparked industrial unrest as the vice-chancellor sought to plug the deficit for the UK’s biggest private sector defined benefit scheme by cutting pensions for 200,000 members who pay into the US.

The UCU, which represents more than 120,000 lecturers and administrative staff, said the scheme’s move to surplus means employers must act quickly to reverse cuts to new pension accruals imposed in April this year. The union calculated that this measure would cut the guaranteed pension of ordinary lecturers by a third.

“We have repeatedly said that USS is an extremely strong pension plan with excellent long-term prospects. The news that the plan is in significant surplus is the latest evidence of our position,” Grady said last week.

USS Chief Executive Bill Galvin has written to employers that improved finances could prompt discussions about cutting benefits or pension contributions.

However, he added that “caution” was needed due to rising inflation and uncertainty around interest rates in a volatile economy, and the corrections to the data were identified as a monitoring report rather than a full formal assessment for the pension fund.

Universities UK, the region’s trade body, said the surplus was “positive news” but dismissed calls for pension cuts to be restored immediately, noting the market was “extremely volatile”.

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