Dennis Leech – Pensions Officer

I am an emeritus (ie retired) professor of economics having been on the staff of the university since 1970. I have been a branch committee member and union caseworker for over twenty years including a period as branch president. I became the branch pensions officer when the post was created after the USS first came under threat in 2011. After attending some of the national briefing meetings it seemed to me that the whole approach to the valuation, that we were expected to accept, was fundamentally flawed and I have been actively campaigning to change it ever since.
I have been campaigning not only within the union but also within the UK pensions industry, where there is great concern, and considerable debate, among actuaries and others about what is happening to pensions. It is no exaggeration to say that there is a pensions crisis as decent pension schemes are withdrawn for new entrants and future generations, to be replaced by totally inadequate ‘defined contribution’ schemes. Also existing schemes are closed to future accrual by existing members. Last year the UCU strike fought off that threat happening to USS. But it was only a temporary win and the threat remains.
I have written a lot about it on my blog and on twitter My argument is that the valuation is based on the implicit assumption of the scheme having to ultimately close, and that drives contribution increases and makes it harder to sustain. The so called deficit originates in this assumption. If we assume instead that the scheme remains open indefinitely (as the HE industry scheme) members can continue to benefit from good defined benefits. This is a matter of challenging the conventional wisdom in the pensions industry that follows the herd instinct in unthinkingly treating all schemes in the same way as a commercial firm which might have a limited lifespan in a risky market place. The USS is different and unique not only in its scale but also in being the scheme for the pre-92 universities which provide a major quasi-public service, able to maintain a strong covenant to support the USS. The USS is not losing money – far from it: it makes a return on its investments in dividends, interest, etc of over £1billion per year over above paying all current benefits from contribution income. The much vaunted deficit is an artificial construct that arises from massively over prudent assumptions. The deficit narrative serves the interests of those wanting to close the scheme against members’ – and employers’ – interests.
I am currently an elected member of the union’s national Superannuation Working Group and of the USS’s Advisory Committee. The newly elected SWG and HEC are working hard to protect members’ benefits.