WEEKEND READING: The time for change is right now: why Northumbria is moving ahead with pension reform

This blog was kindly authored by Jane Embley, Chief People Officer and Tom Lawson, Deputy Vice-Chancellor and Provost, both of Northumbria University.

For over a year, Northumbria University has been grappling with a structural challenge familiar across Post-92 institutions: the spiralling cost of employer contributions to the Teachers’ Pension Scheme (TPS), now 28.68%, is nearly double the cost of the Universities Superannuation Scheme (USS). We have outlined the problem and our proposed response in two previous contributions for HEPI, the first in January 2025, Universities and the Teachers Pension Scheme: the time for change is now, and the second in November 2025, The time for change is now: reducing pension costs in post-92 universities. It is clear that this disparity is no longer sustainable. The numbers remain stark: the additional annual cost to Northumbria of TPS membership over USS exceeds £11 million, equivalent to the fee income of over 800 students.

This disparity arises from a structural unfairness baked into the sector: Pre-92 universities are able to offer USS, the dominant, sector-wide‑ academic pension scheme, while Post-92 institutions are bound by legislation to enrol teaching staff in TPS. This means two academics doing the same job at two different institutions require vastly different employer pension costs, with Post-92 institutions carrying a far heavier financial burden than their Pre-92 counterparts.

Our solution had two elements – we confirmed access to USS for all our academics and colleagues in comparable professional support roles, and we proposed moving to a Total Reward Approach to pay and pensions, where every individual could choose between membership of TPS or USS. Those remaining in TPS would ultimately have a lower salary that reflected the additional cost of pension contributions; while those in USS would have a salary that reflected the outcome of national pay bargaining and the lower pension contributions for that scheme. Individual choice was at the heart of the proposal – no individual would be forced to move pension scheme at a time when the University could no longer bear the cost of TPS.

Our proposals differ from other solutions to the TPS problem – we have not, for example, developed a subsidiary company model precisely because we sought to remain comparable and competitive with other research-intensive institutions. Because there seems to be little prospect of reform nationally, we have sought to bring forward this local solution. Our proposals required negotiation with UCU and we have, since November, sought to agree on a way forward. Ultimately, that has proved impossible, and we now feel we have no choice other than to implement our proposals without agreement.

Exhausting negotiations

Since November 2025, Northumbria and UCU have engaged in frequent, detailed discussions. Both sides have recognised the complexity and personal importance of pension decisions, and the University produced extensive materials, individual guidance from specialist pensions advisers and multiple revised proposals to support colleagues. We have been clear with colleagues that we are asking them to make difficult choices and to engage with a subject that some find very challenging. Not all colleagues understood their pension provision well, and even those who do are being asked to make a judgment about their future in an increasingly uncertain world. Supporting colleagues through those choices has therefore been an important part of our approach – as has giving them the time and the space to make their decision. And of course we are requiring every member of staff to make a decision – doing nothing is effectively an active decision to stay with TPS.

Throughout the process, we have used a variety of feedback mechanisms, alongside our discussions with UCU, and the proposals have been improved by that feedback. These improvements respond to the different challenges facing different staff groups, including those closer to retirement, those with complex health concerns and those earlier in their career, for example.

By March 2026, the process had reached a clear impasse. UCU set out two red lines in the negotiations that ultimately would have rendered any solution unworkable because, unlike our proposal, they do not guarantee that, at a point in the future, the structural disadvantage of TPS would be removed. Those red lines were: that there would be no change for existing TPS members (and no differential salary from those in USS) and that Northumbria would participate in national collective pay bargaining for all staff.

The differential salary for TPS and USS members is at the heart of these proposals – because it is only by using the Total Reward Approach that we can see a path to the removal of additional TPS costs, and of course, introducing that differential approach necessarily involves not participating in the national collective process for all our staff. We have been clear that it would be our intention to return to that process as soon as possible and that we will commit to at least matching the outcome of that process for academic colleagues who are in, or move to, USS.

Throughout our discussions with UCU, and in our discussions with our wider staff base, it has been important to acknowledge that USS is not an inferior alternative to TPS. Far from it: USS is already the high-quality, mainstream pension scheme covering the vast majority of academic staff in UK higher education (particularly in research-intensive and Pre-92 institutions). Joining USS does not represent a weakening of pension provision, but alignment with what the wider sector already provides. USS is also the pension that UCU provides for its own employees.

Where the University moved – and where UCU wouldn’t

The negotiation process has strengthened our proposals and we have made several adaptations that have been shaped by feedback from UCU and our colleagues. This has included committing now to a greater increase in USS salaries than we had originally envisaged (from 2 per cent to 3 per cent); agreeing that instead of pledging now to hold TPS salaries entirely flat we would explore through negotiation with UCU whether there was any scope to increase them; and enhancing the support scheme that we had put in place to support colleagues moving from TPS; providing £500 towards independent financial advice and specific provisions for those close to retirement and those with pre-existing health conditions.

It is also important to acknowledge that UCU did produce counterproposals which engaged with the problem of TPS and which came with a clear acknowledgement that USS is a high-quality alternative to TPS. But ultimately those counterproposals, because they rejected the Total Reward approach, were unable to provide the University with the guarantee that this structural problem could be removed, without a significant ongoing cost. UCU’s counterproposals would have seen the University remain in the collective bargaining process, but, they argued, seen more people move to USS because they also required the University to provide substantially higher payments to staff. The University’s view is that UCU’s proposals did not deliver reliable or sufficient savings and would have reduced the very financial headroom these reforms are intended to create. Ultimately, they would have left the University with no lever to control the cost of contributions to TPS.

Confirming the impasse – and the need to act

By mid-February, UCU confirmed it could not accept the final offer (with 87 per cent of an unspecified number of attendees rejecting it at a branch meeting). Regrettably, following further discussions, it became clear that collective bargaining had been exhausted and further negotiations, including mediation, would not bridge the gap.

Thus, Northumbria has decided to proceed with implementation.

What happens next?

From 1 August 2026, Northumbria will introduce:

• Two salary scales for academic staff, aligned to pension choice.
• A minimum 3 per cent uplift (or the national settlement, if higher) for USS members.
• A TPS uplift only if affordable, to be established via a new local bargaining process in June 2026.
• Choice-based starting salaries for new joiners, reflecting the cost of USS vs TPS employer contributions.

The Transition Support Scheme, via which colleagues can receive a one-off payment or a contribution to their USS pension, remains available until 31 May 2026. The terms include increased minimum payments and flexibility for those considering deferring their TPS or drawing TPS benefits while working. As of 9th April 2026, 149 colleagues have made a formal request under this scheme and, with more than a month remaining, many more colleagues are expected to make this move.

In other words, the University is proceeding with a multi‑year, phased ‘reward envelope’ equalisation model described in our previous blog post which offers a pragmatic, institution-level solution in the absence of national change.

A difficult path, but a necessary one

As we said previously ‘the moment for change is now’. The events of the negotiation period reinforce that conclusion. Securing long-term sustainability and fairness between two groups of staff performing identical roles has required a decision that some will find unwelcome. But our approach preserves choice, protects individuals from forced scheme changes, and offers a predictable path back to parity over time.

It is also worth noting that in our experience, academic salaries in Post-92 universities remain competitive with those in Pre-92 institutions. The issue is therefore not one of pay competitiveness but the pension cost structures that sit behind those salaries. The reforms seek to address that imbalance so that Post-92 universities can operate on a more level playing field while continuing to offer attractive remuneration packages.

As the University emphasises in its communications, this is not the end of engagement: extensive guidance, briefings, and individual support will continue, and a new negotiation will open in June on the 2026/27 TPS pay position. But the core decision, to implement the Total Reward Approach, has been taken.

Ultimately, our sector is weathering unprecedented financial challenges, and securing our future requires radical thinking and doing things very differently than in the past. It requires us to reject conservatism, and certainly, we cannot wait for government action to solve our problems for us. We believe that Northumbria’s approach to pensions change is a good example of the radical thinking required, and we believe it shows that there are paths to sustainability that protect the interests of our institutions, our staff and ultimately our students.