HAVING just returned to his desk after taking part in four weeks’ of pensions-related industrial action, Strathclyde University law school head Professor Alastair Hudson has a lot on his plate.
Not only is he catching up with the day job after manning the picket line, but along with four law academics from other UK universities he is investigating whether a legal case can be brought to help resolve the issue they have all been striking about.
With £50,000 in the bank following a crowd-funding campaign, Academics for Pensions Justice is now close to instructing counsel, including a pensions QC, to bring the matter forward.
The reason for the move, Mr Hudson said, is that there has been a “fundamental breakdown in trust” between Universities UK (UUK) – the body that represents the institutions paying into the Universities Superannuation Scheme (USS) – and the Universities & College Union (UCU).
While academics across the UK were striking over UUK’s plan to close the defined benefit pension scheme and move its members onto a money-purchase version instead, the issue Academics for Pensions Justice wants to probe is whether that decision was based on sound evidence.
“Members don’t trust the valuations that have been put on the size of the pension scheme’s deficit and we thought we should try to establish independently what the facts are and what the liabilities are,” Mr Hudson said.
“We haven’t been asking what the trustees have been doing and whether they have broken any of their responsibilities in law with what’s happened. We have a record-breaking deficit and we want to investigate what’s going on.
“It will help enormously to move towards a situation where this can be resolved. Our underlying objective is to help to get this resolved.”
In its fundraising page on the CrowdJustice website – a platform dedicated to crowdfunding legal actions – the group notes that “large numbers of economists and statisticians have asserted that the decimation of USS pensions is premised upon the construction of a ‘phantom deficit’”.
Although UUK’s decision to close the scheme came after its deficit was put at £6.1bn, questions have been raised about the assumptions used to arrive at that figure, especially as it ballooned after a number of universities, including Heriot-Watt and St Andrews in Scotland, indicated that they wanted the USS to reduce its investment risk.
With less risk dampening the scheme’s ability to meet its long-term liabilities, Academics for Pensions Justice is querying whether its trustees should have looked at how to maximise returns before allowing UUK to move straight to cutting benefits.
“When you talk about ordinary trusts law the rights of the beneficiaries are primary - that’s where you start. With pensions it seems to be the other way round,” Mr Hudson said, adding that part of the appeal of taking possible legal action against the scheme’s trustees is to also test the law in this area.
Not that the case will necessarily end up in the courts, with Mr Hudson noting that the initial crowdfunding money will be spent on discovering if there is a case to answer.
“We’re at the very beginning of this process and want to see what’s available and what’s feasible,” he explained.
“At the moment there is a large number of academics looking at various aspects of what’s happening with the fund to see what our best way forward is.”
With UUK last week tabling an offer to maintain defined benefit accruals at a less generous rate for a transitional three-year period, Mr Hudson feels confident that if nothing else the work Academics for Pensions Justice is commissioning will allow lecturers and other academics to make an informed decision about what they would be willing to accept.
“We five [at Academics for Pensions Justice] are not UCU and we’re not purporting to represent what the members will settle for,” Mr Hudson said.
“We want to test what we think will be a key question for members because we think that will help academics make up their minds about what they will settle for.”
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