A union has slammed what it describes as an “unjustified” cut to pensions at Dundee University after its retirement fund saw a huge financial improvement post-pandemic.
A freedom of information request by Unite reveals the organisation’s pension deficit has gone from £70 million down to £40 million between 2020 and 2022.
The significant deficit was cited as a major reason to shake up pensions for its lowest-paid staff to ensure the university could continue to provide a stable retirement fund.
But Unite says the huge improvement in the deficit position shows the move was knee-jerk.
Unite regional officer Dougie Maguire said: “This newly revealed information shows that the university’s decision to cut the pensions of its lowest-paid staff is not financially reasonable.
“There are currently 985 active members in this pension scheme, with an average age of 45.5 years.
Pensions ‘facing brutal cuts’
“This would mean staff have an average of 22 years left of paying into the pension scheme, which is facing brutal cuts, for no justifiable reason.
“Unite staff began its 10th week of continuous strikes on Thursday with Dundee University refusing to negotiate.”
Meanwhile, the covenant – the ability for the university to cover its liabilities — remains at ‘tending to strong’, meaning it is in a good financial position.
It comes after significant pay rises to executive staff at the university who already earn an average of £134,000 a year.
This includes former Scots Labour leader Wendy Alexander, now the university’s vice-principal for international, who secured a rise of at least £10,000 and now earns around £170,000 a year.
Unite has previously said each member of the university’s executive group receives more in pension contributions than most of the lowest-paid full-time staff get as their total salary each year.
Lowest-paid staff affected by changes
The controversial pension changes relate to the University of Dundee Superannuation Scheme (UODSS), which is only available to the six lowest pay grades.
In 2015, when the deficit was revealed to be £34 million, the university said employees had no need to worry and stressed there were “no plans to change the benefits for staff in this scheme”.
But it is now being partly replaced by a privately administered scheme, leading to ongoing strikes.
Affected staff say could it see retirement funds slashed by up to 40%.
Amid protests, the university agreed not to entirely scrap the existing arrangement and will continue to offer a Defined Benefit (DB) scheme to existing members.
Dundee University says the deficit is still “significant” and requires immediate action to ensure long-term pension provision.
Pension proposals ‘revised and changed’
A spokesperson said: “The figures cited by Unite are not new and all decisions made by the University Court, at its August meeting, in respect of the changes to the UODSS scheme reflected an understanding of the current deficit being approximately £40 million.
“The deficit remains significant and the university has committed to making deficit recovery payments of £40m over the next 10 years. This is in addition to deficit recovery payments of around £14m made by the university over the past five years.
“Court agreed significant reform was needed to ensure the long-term sustainability of pension provision for members.”
The spokesperson said the reforms make affordable pensions available for all staff, including those who cannot afford to join the existing scheme.
He added: “Court’s decision followed 18 months of discussion, negotiation and consultation with staff and the campus unions. Over that time the university revised and changed the proposals considerably from what was originally put forward.”
Conversation