Note: Sent to donors on 28 July 2023

Dear Friends and Colleagues, 

First of all, we are so grateful once more for your support. This has been the biggest crowdfund in UK history according to CrowdJustice, and we have pushed UUK to announce their reversal of the 2022 pension cuts. We didn’t win in the Court of Appeal, and so on Monday we decided to settle the USS directors’ legal costs. There were solid legal grounds for appealing the decision to the Supreme Court. However, we have achieved most of our aims - getting your pension back and shifting the USS’s climate policy - we couldn’t have done it without you! 

(1) The USS Directors’ Pyrrhic victory

The USS directors have a victory that would make Phyrrus chortle. The judgment itself dismissed our appeal on procedural grounds, but said that a previously untested “beneficiary derivative claim” may be used to sue directors for breach of duty in a pension trust: see paras [78]-[90]. This was an unprecedented announcement. So, there were good grounds for us to appeal, but overall it was better for everyone to settle and help the directors focus on their future. The bottom line is that the USS directors will now know, and should be advised, that if they breach their duties, they can be sued personally - including for damages. If, in future, the directors do breach their duties, we will be in touch!

(2) A recap

To recap the reasons that your help and support have mattered so much are that since bringing the case:

1. The USS directors have entirely reversed their position for the 2023 valuation.

   1. They are now reporting a £7.4bn surplus.

   2. They reduced prudence (as we said they should in our 2021 letter), 

   3. They allowed for greater mortality (as we said they should in 2021),

   4. They have updated asset values and made other changes.

2. USS could augment members' benefits to reverse the unnecessary losses they imposed on members between April 2022 and April 2024. 

3. Future accrual of defined benefits could be restored from April 2024.

4. The architect of these changes and USS CEO has announced his resignation.

Our litigation, which thousands of university staff and USS members have supported, has likely had a very substantial impact on the directors’ decisions, and is likely to affect their decisions in future. 

(3) Change worth £8000 per member + a potential pay rise

If members' 2022-2024 benefits are augmented, this could be worth £1.5bn (on average £8000 for each USS member). In the medium term, reversing the April 2022 cuts for future accrual will be worth many billions more. More than this, thousands of UK university staff could now get a pay rise - university accountants are (anecdotally) saying employee contributions could fall from 9.8% to 8%, and employer contributions down from 21.6% to 18% - the level they were at in 2019.

(4) Climate damage 

We have already seen UUK say that it wants USS to commit to examining divestment. We fully expect USS’s position on climate change and fossil fuels to evolve and note that the judgment explicitly points to the possibility of future action against the trust fund being possible - as well as against directors personally for their future conduct.

(5) Governance reform 

This legal action clearly demonstrates how badly the governance of the USS has failed and how little confidence USS members have that the USS directors were acting in their interests. We should not have to raise hundreds of thousands of pounds to hold the directors to account. The USS’s rules need to be changed to allow members a say in how their scheme is run. Universities and UCU urgently need to reform the governance of the scheme so it can begin to recover members’ trust. This legal action is the first step in that process, which needs to start ASAP. 

Once more, we are incredibly grateful for the over 12,000 donations and the amazing support we’ve had from people across the UK. We are also enormously grateful to our outstanding legal team, David Grant KC, Philip Steer, Gus Baker, Meriel Hodgson-Teall, Richard Meeran, Georgia Rycroft and the team at Leigh Day, and also Dr Thomas Da Vieira Costa and Dr Lindsey Pike for their fantastic work in research and communications. This case has been hugely complex, and everyone has handled it brilliantly. 

We would be delighted to meet with UCU branches or other groups to explain the outcome of the hearing and the next steps, which will not, you will be relieved to know, involve asking for more money. 

Best wishes,

Neil and Ewan

We've got a firm court date, for hearings for two and a half days, starting on 13 June 2023! This is the biggest pension fund in the UK, and our case will protect social security, and a living planet if we win in the Court of Appeal. This is the first case in the world to hold directors of a corporation directly accountable for climate risk, and to protect their pensions, including by divesting fossil fuels with a credible plan for clean energy. Everyone has the universal right to social security, and life with a clean environment.

So, please help us, and donate! We must make sure that the USS directors are held to account to the full extent of the law. They must:

• reverse the pension cuts from April 2022, because they assumed of 0.29% p.a. asset growth for 30 years and predicted a nonsense deficit: now USS has changed its growth assumption to 1.8% p.a. (still unreasonably low) and is predicting multi-billion surpluses. This charade must end, and the directors must stop abusing their powers;
• reverse the cuts to undo the discriminatory impact, particularly against women, young people, and on grounds of race. USS must fulfil its equality duties;
• reverse the squandering of beneficiaries' money, such as the inflation of operating costs from £40m to £160m since 2010 with fancy buildings and useless asset managers whose sole aim is to extract more fees. They must put the money back into the pockets of university staff, where it belongs;
• divest fossil fuels with a plan that includes a credible shareholder voting policy for clean energy in all companies. Gas, oil and coal were the worst performing assets in modern history; the 2022/23 energy crisis and price spikes simply underlines their volatility, and they have no future. We will not accept the climate risk to people's pensions, or the damage to our environment.

So please donate and share! We need the finance, and all the publicity we can get. If we stick together, we will win social security and a living planet for everyone!

We have just got leave to go to the Court of Appeal - please donate! By the threshold test that gave us the right to appeal, this means that we have a "real prospect of success" in our claims to:

• go to trial against the directors for their breaches of duty, with the costs paid by USS;

• reverse the April 2022 cuts, based on the nonsense valuation saying pension assets would grow by 0.0% above inflation for 30 years when they actually grew 30% in 2 years;    

• prevent the discriminatory impact of the pension cuts that fall hardest on women, minorities and young people;

• reverse the staggering cost inflation driven by USS managers whose performance has failed;

• make the USS fund divest fossil fuels, because they are a “risk of significant financial detriment”, and members have said they do not want investments that burn the planet.

We have already established the precedent in the High Court that beneficiaries of a pension corporation - like the thousands of donors in this case - have the right to bring proceedings. We did not win the right to go to trial yet, based on an outdated interpretation of the “rule in Foss v Harbottle” (a case decided 10 years before Charles Dickens’ Bleak House). In the Court of Appeal we are arguing that directors have duties under the law in the Companies Act 2006. Those duties are passed by Parliament and they must be enforceable. They include acting for proper purposes in providing pension benefits, acting within the law, not violating the duty of non-discrimination, not inflating costs as performance plummets, and not risking significant financial detriment by staying invested in fossil fuels.

So please donate generously and share! As COP27 begins, it’s never been more urgent for our planet to end fossil fuels. Gas, oil and coal are volatile, risky, and dangerous assets that form no part of the future. The overall mismanagement of university pensions must end completely. We don't want a fund run by the priorities of ex-fossil fuellers and asset managers that fail to perform. We need a democratic fund that follows the priorities of its beneficiaries, for a good pension and a living planet.

We are so grateful for everyone who's supported us so far - many thought that we would not even get to this stage: the High Court has ruled that beneficiaries of a pension corporation can sue directors for breach of duty. However, the High Court failed to give us permission yet to go to trial, based on a wrong reading of the law, and the wrong understanding of the law's purpose.

So, we’re appealing! Please help us finance, and publicise this case. Because the pension cuts were wrong. They are discriminatory. USS must stop wasting money. USS must divest fossil fuels: they're costing the Earth. 

What did the High Court judgment say? First, it said that we can bring a derivative claim. This is no small precedent. But the judge, Leech J, got the rest of the law so, so wrong: 

• he made statutory directors duties impossible to enforce with technicalities dating back to the rule in Foss v Harbottle from 1843, destroying the fundamental principle that ‘if a statute gives a right, the common law will give remedy to maintain it’;

• he invented a hurdle of showing ‘reflective loss’ that has no application to derivative claims, at [30]; 

• he said the only breaches of duty that could have a remedy are those that give directors some ‘personal benefit’, [43]; 

• he got the law on discrimination wrong, and said there was no evidence of particular disadvantage from the cuts to women, young people and minorities [166] when USS itself accepted that there was, e.g. at [96];

• he got the law on fossil fuel divestment flat wrong, missing the key test of the ‘significant risk of financial detriment’ from fossil fuels, at [193]-[197] and ignoring the empirical evidence, including from Imperial College Business School on how fossil fuels have been terrible investments for over a decade;  

• he failed to engage with the basic submission that the valuation assumption of 0.0% growth above CPI inflation is and always was nonsense, and wholly improper, and the evidence of Prof Raghavendra Rau that USS would – even on the worst historical returns – have a £30bn surplus.

The full judgment is here. As Leech J admits, it's ‘lengthy’. To be fair, he was swamped by over 1000 pages of documents from USS lawyers. This bordered on an abuse of process, in trying to concoct a mini-trial, and bankrupt the claimants, instead of confronting the law and the directors' improper conduct.

We’ve already seen change because the failed "CEO" Bill Galvin – coincidentally after we said we’d look to appeal – was telling universities on Monday, 30 May 2022, maybe they could reverse the cuts. Not only should the USS directors reverse the cuts, they need to be completely overhauled - rooting out the asset managers that want to destroy the pension, who don't care about discrimination, and who fail to divest fossil fuels that are burning holes through retirement security and the planet. We are determined to bring real change to USS, because they have been acting in their own interests, not ours. The law says they must.

Thank you so much for all your support, and what you do every day to keep our university sector going. You deserve fair pay and pensions, democracy at work, and equality. We are confident, we are organised, the law is on our side, and if we stick together, we will appeal and win.

We have an incredible update: on 28 February we won our first court hearing in our case. The High Court ruled that we have a prima facie case, and that the claimants - whose action was only possible with your donations and support - are acting in good faith. Now we need your help - to share, and donate more - for the next hearing!

Our barrister, David Grant (to be appointed QC on 21 March) and the team at Outer Temple Chambers has done a stellar job, and we are getting an urgent new hearing that can stop the pension cuts on 1st of April. Our hearing is planned for 28 March. But we need your help again for the next step to cover our costs. The average pledge is £36: and this compares to the £100,000s that a typical colleague will lose if the pension cuts go through in retirement (find your cut here), or the £1000s that we stand to lose in deducted wages now. Please donate £50, or £20, or whatever you can, and share today!

Because we can stop this madness, reform, and have a better pension for the future and our planet, if everyone works together! We can:

• reverse the nonsense valuation: there's over £30 billion in surpluses, even if we went through an era of depression, not a deficit;
• stop the discriminatory cuts: we know the cuts fall hardest on women, young people and minorities, and it's wrong;
• reverse the self-enriching cost inflation at USS, which went from £38m in total operating costs in 2007 to £160m in 2020, squandering your money - the "CEO" Galvin took £291,000 in 2013, and has failed so much and proposed so many cuts he took £756,000 in 2020 from your money;
• divest fossil fuels, as members called for in the November 2020 ethical investment survey - the failure of USS to do so just cost us £500,000,000 in write-offs from Russia's appalling invasion, and all because the failed USS chair and directors had careers in coal and fossil fueled banks.

We call on USS to immediately halt their vicious, wanton cuts to university pensions, cut their super-inflated costs, and divest completely and immediately from fossil fuels that bankroll authoritarian politicians the world over. We need instead to have democratic governance reform, and a shareholder investment and voting policy for USS assets that follows the environmental, social and governance values of members. They must halt the cuts until we have a full and fair hearing in open court about the harm they have caused. We are determined to bring personal responsibility to the directors for the damage they've wrought. Their time is almost up - they need to do the right thing. 

Please share and donate today, because we can win! 

On Friday, 29 October, we issued proceedings in the High Court, and served notice at the offices of the USS directors. 

Just as we've promised, and with a total failure to adopt any meaningful change from the USS shadow director or "CEO", Bill Galvin, and the board of directors of USS Ltd as whole, we've launched a derivative claim against them. This is the first time they have ever faced the prospect of personal accountability for the damage they have caused, and we are going to use the law to its fullest extent. 

Our action is to apply to sue them in the name of the company on behalf of all members of the pension. The four claims are:

• that the valuation of the pension in a stock market crash, and its methodology, is a breach of duty: it's at least a misuse of directors' powers, and failing to take into account relevant considerations of the assets' recovery;
• that the proposed cuts amount to unlawful discrimination, particularly as they hit women, ethnic minorities and young people the most;
• that the directors have driven a super-inflation in asset manager and total operating costs at USS in a way that serves themselves, not the company - instead of proposing to cut the pension, they should cut their costs;
• that failing to divest fossil fuels has caused, and will continue to cause significant financial detriment, and is against the interests of the beneficiaries.

Now the claims will be reviewed in the High Court. We hope for a swift granting of permission to proceed to a trial. Please share the news, and let's change our pension scheme for good!