Workers Strike at 60 UK Universities Over Pensions, Pay

Eight days of strikes at 60 UK universities kicked off Monday as University and College Union (UCU) members are protesting disputes over pensions, pay and working conditions.

Among the universities seeing strike action are the University of Cambridge, the University of Oxford, University College London, and the University of Edinburgh.

“It is quite staggering that the employers have allowed things to get to this stage and done so little to avoid the upcoming disruption,” UCU General Secretary Jo Grady said in a statement. “Instead of engaging seriously with us over the various elements of the disputes, they have been all spin and no substance.”

Last month, UCU members backed strike action in two disputes, one of which concerned the Universities Superannuation Scheme (USS) pension plan. The other concerned pay, equality, casualization, and workloads. The union said 79% of UCU members who voted favored strike action in the ballot over changes to pensions, while 74% of members polled backed strike action on pay, equality, casualization and workloads.

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The main issue UCU opposes is a decision by the USS Joint Negotiating Committee to raise member contributions to 9.6% of their salary from the current 8%, with additional contribution hikes planned from 2021. The UCU offered a counterproposal that called for USS members to pay the standard rate of 8%, with employers covering everything else.

“We are incredibly disappointed they have pushed to burden members with unnecessary and unfair extra costs,” said Grady. “These increases have serious consequences and may force some members to leave USS, jeopardizing not only individual retirement plans but the future of the scheme as a whole.”

The union warned that additional strike action could follow in the new year with even more staff taking part if universities fail to make improved offers. UCU said it is consulting with its branches at other universities about being polled again to join further action.

The strike, which began Nov. 25 is expected to last until Dec. 4. It involves issues such as working strictly to contract, not covering for absent colleagues, and refusing to reschedule lectures lost to strike action.

Angela Rayner, the UK Labor Party’s shadow education secretary, said she supported the workers in their strikes.

“Fair pay, secure contracts, reasonable workloads and decent, affordable pensions should come as standard for all those working in education, including in our universities,” Rayner said in a statement. “It is time for the employers to put their students first and avoid any further disruption by bringing a reasonable offer back to the negotiating table.”

Last year, workers at 64 universities in the UK went on strike for four weeks over plans to end the defined benefit element of the USS pension plan.

UCU Members Vote on Summer Strike Suspension

Over 1 Million UK Students Will Be Affected by Pensions Strikes

Tags: Angela Rayner, Jo Grady, Pension, strikes, UCU, United Kingdom, Universities Superannuation Scheme, University and College Union

The New Mexico State Investment Council outlined a general blueprint to restructure its private equity program to make it a more effective asset class for the $26 billion portfolio.

The propositions of the restructuring include expanding the amount of funds and capital commitments in the program. This includes increasing the program’s pacing plan to an annual aggregate commitment amount of $75 million to $125 million, ideally in a “steady state environment,” meaning capital distributions and contributions are at roughly the same levels.

Notably the council wants to focus on boosting the local economy by forming an emerging manager program that would allocate capital to in-state investors, ensuring local entrepreneurs have access to multiple sources of financing across different stages.

The emerging manager program would be illustrated as such:

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Pre-Seed / Seed Stage

• ~$100k-500k per deal

• Highest economic impact at this stage (most opportunity for job growth from low base)

• Highest risk (two-thirds of VC deals fail to return capital)

• Pro rata optionality (to invest in later rounds if companies prove successful)

• Potential for early stage return multiples for “winners”

• Seed and early-stage investments account for majority of the gains in VC asset class

“Feed” / “Core” Stage Deals

• Generally those companies that have met key milestones established during earlier stage financings (likely only 20-25% of seed deals)

• ~$1 million-$2 million per deal to maintain pro rata ownership

• Seed managers typically need access to some follow-on capital in order to fund successful companies and have a reasonable prospect of earning returns; difficult to have strategy solely focused on high loss ratio seed deals

Later Stage Deals

• ~$2 million-$4+ million in later-stage deals (often companies from early-stage deals from prior funds), proven “winners”

• Potentially also some investments in later-stage strategies such as buyouts and growth equity

• At this stage, companies often looking for more than capital, may need help expanding / scaling their business

• More risky from an economic development perspective – at this stage, there is a higher likelihood that businesses are using capital either (i) to fund expansions into other states / regions or (ii) to bridge to a sale; SIC has had mixed success with these investments

The council would allot a maximum initial commitment of $5 million and put a cap on aggregate commitments towards one manager of $25 million, with the key principle that no fund commitment would exceed 20% of the total capital of any fund. The fund says this “creates incentive for managers to raise outside capital, which follows best practice for this type of economic development program.”

Emerging manager commitments wouldn’t exceed 30% of the total commitments made by New Mexico during a calendar year, and the program is recommended to have an absolute return benchmark of 5%.

The overall private equity program will have a 9% allocation pursuant to the new pacing model, with an upper and lower range of +/- 2% (11% or 7%).

A snapshot of information on New Mexico’s private equity program performance for their active commitments is below (all monetary values are in USD millions):

Strategy	# of Funds	Commitment	Net Contributed	Net Distributed	Total Value	Net IRR (3/31/2019)
Venture Capital	11	$181.5	179.4	166.9	181.6	0.2%
Growth	18	788.1	498.2	254.8	704.0	9.8%
Buyout	63	3,022.3	2,045.7	1,561.5	3,191.5	12.1%
Special Situations	22	921.2	661.4	549.4	876.8	7.6%
Subtotal	114	4,913	3,384.7	2,532.5	4,954.9	9.6%

Tags: Emerging Managers, New Mexico, New Mexico State Investment Council, Private Equity, Venture Capital