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Michael Otsuka @MikeOtsuka
, 4 tweets, 2 min read Read on Twitter
I've finally had a chance to read 'Risk Is Not a Four-Letter Word' by Hilary Salt -- aka @RedActuary. I highly recommend it to academics in USS. Hilary is one of @ucu's two actuarial advisors from @FirstActuarial, and... 1/

contingencies.org/risk-not-four-…
...people should read this to get a sense of the wisdom and broader perspective of the person who, along with @Derek_Benstead, has been producing such a stream of brilliant papers for @ucu about USS. As well as for her general remarks on our changing attitudes towards risk,... 2/
...it's also well worth reading for her account, in the section entitled "U.K. Pension Schemes", of what has gone wrong with DB pension schemes in this country over the past couple decades. 3/
People who are interested in imaginative and useful progressive thinking in this country should look beyond universities and think tanks and also read the unique contributions of the actuaries at @FirstActuarial. 4/4
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In their new valuation #USS continues to make a "large and demonstrable mistake" in applying Test 1, which they now ineptly try to explain away by contradicting past statements (see embedded thread). 1/
JEP has made a strong case for funding existing DB & DC benefits at a lower contribution level than USS is calling for. 2/
But the regulator (tPR) is calling for an even more conservative valuation than the one #USS issued last week. 3/
Read 19 tweets
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#USS provides blinkered, inaccurate, exaggerated measures of risk in their consultation document, all three of which are tied to the gilt yield. More comments below. 1/
The first (see 5.4.1) is their measure of 'long term risk' in terms of their infamous Test 1 gap to 'self-sufficiency' in 20 year's time. Self-sufficiency is a gilts+0.75 portfolio. 2/
As I explain in this thread, it's only when they rewrite history by contradicting past statements that they are able to show a need to 'de-risk' into bonds in order to meet this test. 3/
Read 19 tweets
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🚨🚨🚨#USS contradicts itself in its latest attempt to answer the critique arising from @Sam_Marsh101's findings regarding expected asset level 20 years hence. See the following highlighted passage from p. 12 of the consultation document on the 2018 valuation: 1/
This parenthetical claim is an attempt to deny that they ever assumed that col 1 row 1 would equal col 2 row 1 in @Sam_Marsh101 graph below. 2/
But the record shows that #USS previously identified the target path as the expected path. See this highlighted statement from the transcript of @GuyCoughlan's video of May 2018: 3/
Read 12 tweets

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So: #USS is undertaking a new valuation (of funding position in March 2018). 1/ #USSstrike
Bill Galvin, #USS CEO, implicitly puts onus on #UUK for problems of 2017 valuation, stating that employers had given a "very clear view" to USS to "take less risk than was laid out in its [USS's] original proposals" uss.co.uk/how-uss-is-run… 2/ screen shot of part of document linked to in tweet
There is clearly dispute between #USS and #UUK over this: the #JEP, we should remember, said that it had 'not taken a view' on the differing perspectives of #UUK and #USS over the shift from the Sept to Nov TPs & valuation assumptions ussjep.org.uk/files/2018/09/… 3/ screen shot of p. 45 of document linked to in tweet
Read 10 tweets
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UPDATE on 2017 #USS valuation.

Universities UK has told me:
“Employers support the JEP’s recommendations, subject to acceptance from the USS Trustee and The Pensions Regulator, and to further information for employers on risk and its implications.”

1/
#UUK: ”We look forward to discussions with UCU, and with the USS Trustee, over the coming weeks as we seek a jointly agreed solution.”
2/2
#UUK has further clarified that employers support “all of the recommendations put forward by the panel” – subject to the conditions outlined in earlier tweeted statement.
Read 14 tweets
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Reading fhrough the Joint Expert Panel report and it is quite bruising for the #USS, #UUK and Pensions Regulator.

Key comments from the Executive Summary of the JEP report to follow:
Firstly, on the Trustees’ use of 3 tests to help assess contribution affordability. The Panel thought the Trustees gave “too much weight” to “Test 1” which was not being used as a “stop and check” reference point but “constraint” on benefit design and investment strategy. 1/
The Panel said that “insufficient weight” was given to the fact that USS was a large, open scheme that was cash flow positive. The “strength and diversity” of the HE sector appeared not to have been taken into account “in some areas”. 2/
Read 17 tweets
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🚨JEP IS OUT🚨

Initial thoughts in thread to follow👇 #USS

ucu.org.uk/media/9523/JEP…
As ever, the excellent @JosephineCumbo has provided a succinct summary of what the recommendations are, & I don't see any need to reproduce that.
I'm v happy to see the disruptive role of Test 1 being acknowledged & criticised. I'm also v happy to see suggestion that employers attitude to risk & the affect this had on the covenant be re-evaluated. Likewise it's good to see assertion that updated data & measures be used.
Read 11 tweets
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Whether it is bull market or bear market, #TheThougtfulInvestor by @BMTheEquityDesk offers some very useful guidelines for investing. A few quotes from the book:
1) Most Investors can't figure out ki paisa jaldi banana hai ki jyada? (Most investors can't figure out whether to focus on the speed of the return or the size of the gain)
2) An investor has to be lazy in taking profits and agile in cutting losses.
Read 36 tweets
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You: Star Trek science is silly
CERN: we stared at antimatter and are pretty sure reality is fake
academia: we're concerned about your humanities field, it's speculative and not rigorous
top physicists:nothing is real, according to theory
STEM nerds: no, I don't need to listen to you explain how Derrida didn't mean that the author is dead
Also STEM: the cat is a metaphor,idiot
Read 247 tweets

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