University and College Union, which represents university workers across the U.K., is in talks with its members about a proposal to increase contributions to Universities Superannuation Scheme, London, by at least 8.4% of salaries, a union spokesman said.
According to the union, Universities UK, the sponsoring employer, would need to raise contributions to 23.5% of salary from 18% and participant contributions would need to increase 10.9% from 8% of salary to ensure current benefit promises can be kept at retirement.
USS said in September 2017 that the £60 billion ($81 billion) pension fund is running a deficit of more than £5 billion, while the cost of funding future benefits has increased by 35% in three years. During negotiations with the union, Universities UK maintained that the guaranteed benefits must end due to increasing cost of fund administration.
But the union disputes the USS valuation, saying it "has created an artificial crisis in a fund which is healthy both in terms of its growth and its financial underpinning," the UCU spokesman said.
"We have engaged fully in the current negotiations with the primary aim of preserving a decent, guaranteed pension for staff. Without this, it is likely that the sector will face prolonged industrial action and USS institutions will see staff vote with their feet and seek jobs elsewhere in the sector or beyond where the rewards are both better and guaranteed," the spokesman said. "While UCU is fully committed to a negotiated solution if this is possible, it is not clear yet where these talks will end up."
USS spokeswoman could not be reached to comment.