Britain’s university sector is a jewel in the nation’s crown. It is a world leader in research, generates £20bn in export revenues and is credited with playing a big part in raising the productivity of the UK’s workforce during a period of rapid expansion in the 1990s and 2000s.

So successful have universities been in attracting students – even in the teeth of a huge rise in course fees – that they have managed to paper over deep cracks in their finances.

One of the deepest cracks is in the academics’ pension fund, the Universities Superannuation Scheme (USS). Despite a yawning gap in the fund’s assets compared with its liabilities – a deficit of more than £20bn at the last count on liabilities of £87bn – the university lecturers’ union, the UCU, began to ballot 52,000 members of the scheme on taking strike action this term to prevent the scheme’s trustees from hiking contribution rates.

An increase in pension contributions is an effective pay cut, and the scheme trustees have planned three over just 12 months. The first was in April and the second and third were due in October and next April, until university employers agreed to defer them while talks take place with an independent body.

Why, you might ask, has the union pressed ahead with a ballot when the employers have already agreed to discuss alternative ways forward and put planned contribution increases on hold? Surely it would be madness to have a second year of strikes, denying students teaching time when they have paid through the nose, and when it is clear the fund is in deep trouble?

The union says the deficit calculations made by those who run and regulate pension schemes are exaggerated. In fact, it maintains, the entire structure of the university sector should be transformed so staff get higher pay, long-term contracts and shorter working weeks as well as cheaper pensions.

Criticism of the USS scheme comes directly from the top of the UCU and its new general secretary, Jo Grady. Before taking up the post last May she was a lecturer in employment relations. Backed by her master’s degree on the causes of the pensions crisis and a PhD on the effects of pension disputes, Grady believes the final salary schemes Britain was famed for in the 1990s could and should have been saved.

USS pensions are no longer based on final salary but on career average salary. Almost every final salary scheme has over the past 25 years shut down or at least closed to new members, after admitting that rising life expectancy and falling investment returns meant they were unaffordable. Grady wants to make a last stand.

This will be possible only if the trustees do two things. First, they must tell the universities to pay much more into the fund; second, they must take a trip to the pensions equivalent of Las Vegas with the majority of the scheme’s £64bn of assets placed on stock market bets.

The truth is, the boat marked 'guaranteed pensions' has sailed for all but government employees

Sadly, after Theresa May’s cap on foreign student numbers and seven years of almost flat student fees, many universities are in dire financial straits, so won’t be amenable to the first idea. And as for the second, placing bets directly on corporate stocks is not a risk the pensions regulator is willing to take.

Universities reported surpluses in excess of £2bn in 2016, but as with local authorities, these sums are in response to austerity and the threat of worse to come, not a disguised slush fund.

Academics can say they have already made sacrifices. Like their cousins in schools and local government, USS pensions are no longer based on final salary. And members with salaries of more than £57,000 are obliged to put any extra contributions into a scheme that relies on investment returns, much like those offered by most employers.

Thousands of university employees have found themselves on zero-hour contracts and with little or no benefits as the universities’ scramble to survive has followed the traditional British management route of short-term thinking and crude cost-cutting. But academics are fools if they think they can work for 40 years and retire on a half salary for another 25 years. The pension fund debt is real, and so is the weak financial situation.

The truth is, the boat marked “guaranteed pensions” has sailed for all but government employees. At least unless people pay more or accept less in retirement.

Grady may believe her pensions calculations are better than the industry’s and her executive may back her, but it’s too late. The government is behind the regulator, and the regulator, after a series of pension fund crashes, puts prudence first.

If academics want a fight, they should be tackling the plight of their younger colleagues. Zero-hour contracts and jobs with few benefits shame higher education.

• This article was amended on 19 September 2019 to clarify earlier in the argument that USS pensions are no longer based on final salary but on career average salary.