Dear Prof Nutbeam,
We would like to share with you how concerned your colleagues are regarding the proposed abolition of the Final Salary Scheme (FSS). Such a change would significantly affect both established and early career staff who have been encouraged to make future plans on the provisions of this scheme. We are deeply concerned that Southampton has been pulled into a proposal that could produce significant decreases in the financial security of staff.
We are particularly concerned at the lack of transparency surrounding this issue. Indeed, there are increasing reasons to dispute some of the fundamental conclusions that underpin the proposed changes.
Therefore we appeal to you that you withdraw the University of Southampton from the USS / Universities proposal that includes elimination of the Final Salary Scheme.
To elaborate, we support the letter from the group of internationally recognised statisticians concerning the errors in the Employers Pension Forum regarding “Proposed Changes to USS – Myths, Misconceptions and Misunderstandings”.
Furthermore, we agree with the questions raised by Oxford Professor Cooper regarding the assumptions behind the valuation of the Pension Fund. In particular
“It is hard to avoid the conclusion that the proposed decrease in our pension benefits is due to an unreasonable method of calculating the deficit and a mis-conceived reaction to it. Central UCU officers have been arguing with USS for a more sensible valuation method, but so far without success….Since most of the USS investments are not in gilts, it is not at all clear that this is a sensible way to estimate the liabilities, especially when the gilts market is in an unusual state. The problem is not the investment strategy, which has performed well, but the calculation method.”
We were informed that the changes introduced in 2011 would assure the future viability of USS, details here.
We also agree with the Hutton Pension report’s recommendation on Final Salary Schemes that these should be respected as well as protected, that the cost in erosion of trust is too high.
Based on the conclusions of both eminent experts and third party professional analysis provided by the UCU, and in concert with the Hutton report’s recommendations, we do not see a fair basis for the radical set of proposals put forward by the Universities/USS.
We therefore request that you act on behalf of your colleagues and assume a leadership role in these pension discussions and withdraw the University of Southampton from supporting any proposal that would disband the Final Salary Scheme.
Members of Electronics & Computer Science
Maruitis de Planque
Stephen B Gabriel
Bill Redman White
Alex S Weddell
Members of Geography & Environment