Posts Tagged '#Pensions'

Why the UCU strikes are bound to be insufficient to ensure equality

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Jan Deckers, Newcastle University

Jan Deckers, contributor to Justice and fairness in the city, talks about the UCU strikes, currently underway.

“Members of UCU, the University and College Union are on strike over a proposed change in the Universities Superannuation Scheme (USS), or pension scheme. The crux of this proposal is a transition from a Defined Benefit to a Defined Contribution scheme, where it will be much less clear what benefits employees will receive when they retire. Whilst employers would reduce their contributions from 18% of salary before tax to just 12%, employees would shoulder greater individual risk due to individual (rather than collective) portfolios being gambled on the stock market.

We are all in this together, right? The fight over pensions essentially pits the hierarchies of higher education institutions against those who are lower on the echelons of power, as the executive heads of UK universities and colleges make up Universities UK, a charity that, amongst other things, negotiates pensions with USS. Whilst not all vice-chancellors and principals are united in the push for changes in said pension scheme, the rift suggests a worrying trend as salaries of senior academics have increasingly been criticised as unfair.

In my work I consider how salaries ought to be allocated within large organisations, and I have provided my own organisation, Newcastle University, as an example. I argue that decisions about what people’s salaries, and therefore also their work pensions (or deferred payments), ought to be are best made by starting from an egalitarian baseline. Any changes from this baseline must be justified by reference to a number of criteria. These include: controllable effort; duties in relation to unpaid work; health care needs; morally significant debts; and historic unfairness.

Let us take each of these factors in turn. It is important to start from an egalitarian baseline where every employee is paid the same amount for each hour worked as, in the absence of countervailing evidence, treating people equally demands that we assume that they work equally hard. In practice, however, people’s commitments vary, which is where controllable effort comes in. Whilst it may be unfair to discriminate against those who may be naturally or culturally predisposed to be less committed, it seems fair to reward those who voluntarily work harder. A pat on the back in the form of a bonus payment can incentivise hard workers to keep up the good work or to work even harder.

Where governments fail, employers should also compensate for employees’ varying duties in relation to morally important unpaid work, for example for the many hours of care work that is predominantly carried out by women. Their health care needs are as important as everyone else’s. This is why employers must more generally vary payments so that those with complex or expensive health care needs that are insufficiently addressed by governments and insurance schemes can afford the health care that they deserve. Payments must also consider morally significant debts, for example, those that some employees may have accumulated to qualify for their jobs. Finally, payments must also take into account historic unfairness. Yes, some who have been overpaid in the past may justifiably be paid less in the future.

“…without explicit attention and careful calibration of these morally significant factors, the battle over pensions is likely to be dominated by the narrow self-interests of individuals and their institutions.”

There is no evidence that careful consideration of these criteria has altered decision-making in large organisations, and a dearth of evidence that they have been discussed in the academic literature, in spite of this neglect resulting in significant negative health impacts. My fear, however, is that without explicit attention and careful calibration of these morally significant factors, the battle over pensions is likely to be dominated by the narrow self-interests of individuals and their institutions.

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Credit:  Flickr: Nick Efford (CC BY 2.0)

Many of my colleagues know that there is something rotten in the state, but one does not need to become a comrade to know that the occasional handouts, usually around Christmas time, to poorly paid staff are not quite sufficient to trigger significant change for the better. Unless current discussions regarding this pension scheme engage in serious discussion about these criteria, it is my concern that especially those who will be the worst off may come to rely even more on charity, rather than on fairness, from those who wield power over them.

It might be argued that the fair pay and pension scheme that I have sketched here is not fair either as it falls foul of what I call the ‘brain drain’ objection. A charity such as Universities UK might seek to justify a less egalitarian scheme by appealing to some notion of the greater good or the lesser evil. If a more egalitarian scheme was implemented, it might lead to people with big brains leaving higher education, resulting in a loss in economic power and an even greater deficit in the pension scheme than that envisaged by Universities UK, which is based on a rather dire prediction. Whilst the ‘brain drain’ objection must be taken seriously, it is rather ironic that this prediction suggests that there is little confidence in the future of higher education in the UK, at a time when the managers of various institutions have awarded themselves significant pay rises for their efforts to secure this future.

In all this, it must be emphasised that this lack of solidarity has a significant inter-generational component. However, not only younger academic colleagues stand to lose a lot. Now that many students in the UK have to pay tuition fees for which they enter into significant debt, these same students will lose out once again as they face the negative consequences of strike action, for example through class cancellations.

Justice and fairness in the city_for web [FC]

Justice and fairness in the city, edited by Simin Davoudi and Derek Bell was published in 2016 and is available with 20% discount on the Policy Press website. Order here for just £19.99. Jan’s chapter from the book is available to read free here.

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The views and opinions expressed on this blog site are solely those of the original blog post authors and other contributors. These views and opinions do not necessarily represent those of the Policy Press and/or any/all contributors to this site.

One size does not fit all: the problem of extended working life policy

Áine Ní Léime and Debra Street, co-editors of Gender, ageing and extended working life, launching today at the British Society of Gerontology conference, discuss problematic extended working life policies, and their potential consequences for both women and men in later age. 

Debra Street

Áine Ní Léime

“How can affluent countries “afford” pensions for ageing populations?

Some policymakers prefer one answer—people should simply work longer, thus cost less. Increased longevity makes policies to extend working lives appear logical and seem potentially benign.

Favoured initiatives range from increasing state pension ages, requiring higher/more frequent worker pension contributions, eliminating mandatory retirement, and introducing anti-age discrimination legislation. They run concurrently with the broader neoliberal agenda of pension privatisation, making individuals (rather than employers and governments) more responsible for providing their own pensions or working to much later ages.

“Extended working life policies focus almost exclusively on reducing state pension costs…”

Such policies are highly problematic and reflect a fundamental misunderstanding of the complexities of current employment arrangements and future job markets. Extended working life policies focus almost exclusively on reducing state pension costs, with scant attention to existing gendered differences across the life course, whether associated with adequate pay and flexibility to balance work and family responsibilities, working longer, or amassing pensions.

The upshot: women and men, unsurprisingly, would fare quite differently.

 

Back to the future: work ’til we die?

Workers in physically demanding and/or stressful jobs such as construction, cleaning or caregiving are likelier to have chronic health conditions or to be worn out by work as they approach the traditional state pension age, usually 65. Many started work at younger ages than the more advantageously employed, so they may already have spent 45 or more years at work by age 65.

Increasing state pension age requires them to work longer still. This punitive measure ignores their experience of already extended working lives, albeit at the younger end of the adult life course. It is unfair to deprive them of the choice to stop or work longer.

Because gender norms designate women as the primary providers of unpaid care for children and others, many have employment histories punctuated by breaks in paid work or long spells of low- paid, part-time employment to juggle work and family responsibilities.

Demanding work to older ages and greater pension contributions to qualify for minimum and maximum state contributory pensions makes it more difficult for women to get a full state pension and greatly increases their risk of poverty in old age.

Extended working life policies assume demand for older workers. Yet little evidence suggests that is true. Research on age discrimination in employment shows that jobs for older workers are typically scarce and poorly paid, if unemployment happens as it did during the recent recession.

Older women seeking employment face the “double whammy” of ageism and sexism, rendering women ”socially older” than comparably aged men, making re-employment more difficult. Precarious work is growing in all countries and, while women traditionally predominated in the precarity, men are increasingly relegated to non-standard work.

Many women and all precarious workers have episodic pension contribution patterns that make poverty in old age more likely. Finally, privatising pensions is especially detrimental to women’s pension provision, since they are typically in lower paid jobs that make private pension contributions unaffordable.

 

Where do we go from here?

The way forward is not obvious. There is a need for more thoughtful, flexible policies, if women, workers in physically demanding and/or stressful jobs, or those in precarious employment are to be expected to work longer.

To understate, we are not particularly optimistic that such adequately enlightened policies will be enacted.

“An adequate universal citizen’s income is one policy refinement that could offer a genuine choice to people nearing retirement age.”

Working longer offers a welcome option for some workers in rewarding, interesting, physically undemanding occupations, but it should not be a requirement for all workers. Calls for an adequate universal citizen’s income is one policy refinement that could offer a genuine choice to people nearing retirement age.

Since women and precariously employed individuals are more likely to depend on safety-net state pensions, a citizen’s income would benefit them most. Unfortunately, debating the merits of citizens’ incomes does not implement them and evidence of policy appetites for such proposals is disheartening.

It seems obvious that the fragility of labour markets for workers of all ages should give policymakers pause before assuming (as they seem to have done so far) that rising pension costs can be stemmed by unilaterally extending working life for all. Such policies will inevitably fall far short of expectations, given that they ignore real experiences of working lives shaped by gender and other work/life circumstances.

‘One-size-fits-all’ extended working life policies—undifferentiated for women and men, for physically demanding work and white collar occupations, for the precariously and the securely employed—are clearly neither benign, nor logical, nor capable of meeting the varied economic needs of ageing individuals.

Gender, ageing and extended working life edited by Áine Ní Léime et al. is available with 20% discount on the Policy Press website. Order here for £60.00.

Find out more about impact, influence and engagement at Policy Press here.

Policy Press newsletter subscribers receive a 35% discount – sign up here.

The views and opinions expressed on this blog site are solely those of the original blog post authors and other contributors. These views and opinions do not necessarily represent those of the Policy Press and/or any/all contributors to this site.

As pension ages rise, what are our prospects for working longer?

In March of this year the UK government began its long-term review of state pension ages, with a number of commentators predicting large increases in the age of eligibility. David Lain, author of Reconstructing Retirement, sets the context for this review by considering wider changes to retirement policy.

David Lain 4It is commonly said that retirement is changing, with people increasingly expecting to do some form of paid work after ‘retirement’ age.

Sara Rix from AARP, for example, reports perceptions from the US that Baby Boomers will ‘reinvent and/or revolutionise retirement… they will… combine work and leisure in new and more rewarding ways’.

Increasing employment

In reality, however, it is arguably governments that most want us to ‘rethink’ retirement. In my view UK and US governments are actually seeking to reconstruct retirement, by increasing employment at age 65+ and dissolving the notion fixed retirement ages. They are doing this in two ways. Continue reading ‘As pension ages rise, what are our prospects for working longer?’


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