Union members at Solent University have voted to strike as 286 non-academic employees are moved into a private company and out of the Local Government Pension Scheme. The UCU is also balloting its members at Northumbria University about being transferred from the Teachers’ Pension Scheme to the Universities Superannuation Scheme. 

A strike ballot was held when Solent University in Southampton decided to move 286 professional services staff into a corporate subsidiary, Solent University Services Ltd, following a consultation exercise. The ballot showed that the vast majority (93%) of those who voted (72%) are willing to walk out. 

“This huge vote for strike action shows how enraged staff are at management's decision to force colleagues out of their preferred pension scheme,” said Solent UCU branch president Stephen Desmond. “The vice-chancellor must now see sense, start respecting his staff, and begin working with UCU to protect pensions. If he refuses to do so, he is laying the ground for huge disruption in the new year.”

UCU general secretary Jo Grady added: “Our members have the full weight of the national union behind them in their fight to defend their retirement, and we urge management to do the right thing and change course.”  

A Southampton Solent University spokesperson said: “Like many other universities across the sector, Southampton Solent University is exploring a range of options to strengthen our ongoing financial sustainability, ensuring the University continues to support our students in their education journey. As part of this, and to secure jobs within the University, we have taken the decision to transfer a number of professional services staff from the Local Government Pension Scheme to the Solent Pension Plan.” 

 

The spokesperson added: “This decision was not taken lightly, with staff feedback taken into consideration throughout the consultation. However, it was decided that the potential savings, reduction of long-term risk and alignment of our workforce were significant enough that the transfer was necessary.”  

The union accused managers at Solent of “fire and rehire practices” while presenting the change as a TUPE transfer. Declining to transfer would have meant employees resign from their posts.

Those who opted to transfer – all 286 according to the UCU – will be offered membership of the Solent Pension Plan, a defined contribution scheme in the Aviva Master Trust. Financial guidance is provided as part of support to staff. 

 

Before the change, more than 40% of professional services staff at the university were already only eligible for the DC scheme.

Employing staff through a limited company to prevent their entitlement to defined benefit pensions is a practice also used by NHS managers, including at Airedale Hospital, where 200 workers will walk out later this month. Following engagement by the GMB union with health secretary Wes Streeting, NHS England recently launched a consultation to limit the creation of NHS subsidiaries and give staff the same terms and conditions as other employees. 

   

   

Many cash-strapped universities are looking to curb the cost of future accrual. Strathclyde University moved employees out of the LGPS last year to access a pension surplus and save on future costs. 

Now, as well as Solent putting some staff into a DC scheme, Northumbria University – based in Newcastle – is proposing to move about 1,200 academics out of the Teachers’ Pension Scheme and into USS, prompting a strike ballot by UCU that closes on 23 January. Those who refuse to leave TPS will have their pay frozen in the short term.  

“Threatening strike action is a last resort for our members, but telling staff they must choose between their pay or pension is not a tenable option,” said Grady. “Our members are rightly furious about this attack on their retirement security and should not be forced to pay the price for decisions made by a university management that is rushing through a process which has no place in higher education. It needs to rethink these plans and work with us, or face both serious reputational damage and disruption on campus.” 

The university argues that TPS is a drag on its finances. 

A spokesperson said: “The Teachers’ Pension Scheme cost has grown significantly, creating a widely recognised problem in higher education. Newer universities, like Northumbria, that are required to offer TPS, pay almost 100% more in pension costs than universities offering the Universities Superannuation Scheme, such as Newcastle and Durham. This puts newer universities at a significant disadvantage when the sector is already facing severe financial pressures. Universities, UCU, and the Universities and Colleges Employers Association, have called on government to act.” 

An employer contribution rate of 28.68% means the Teachers’ Pension Scheme costs Northumbria more than £22.5m annually, while USS would be £11m less because of a contribution rate of 14.5%. 

“To address this, we have reached agreement to change our membership terms with USS and can now offer colleagues the option to transfer to USS if they wish,” the spokesperson said. In addition, higher grade support staff can also move to USS. 

As part of the change, the university is proposing a total reward approach. Those in TPS would still have access to annual pay rises and promotions, “but salary levels at each grade point will not increase in the short term, in recognition of the very high pension cost”, the spokesperson explained, while “colleagues who are members of USS will receive competitive pay increasing annually with sector awards”.

“We believe this approach is fair as it provides colleagues with choice while addressing sector-wide pension disparities that place a significantly higher cost burden on post-1992 universities, and we are engaging openly and transparently with colleagues and UCU to shape our future plans,” the spokesperson added.

TPS remains more generous than USS mainly thanks to its accrual rate and lack of salary cap. It changed to career average benefits in 2022, accruing at 1/57th with members contributing between 7.4% and 12%, depending on salary. In comparison, USS, also a CARE scheme, has a 1/75th accrual rate capped at £71,484 of salary, for an employee contribution rate of 6.1%.