The Panel looked in detail at the methodology, assumptions and tests employed by the Trustee, and particularly at USS’s ‘Test 1’ which underpins the 2017 valuation.
"In the Panel’s view this test has assumed too much weight in determining the valuation."
2/
"In the Panel’s view this test has assumed too much weight in determining the valuation."
2/
The Panel unanimously recommended 4 areas where adjustments to the 2017 valuation should be considered:
1. A re-evaluation of the employers’ attitude to risk, which would result in a re-evaluation of the reliance on the sponsor covenant.
3/
1. A re-evaluation of the employers’ attitude to risk, which would result in a re-evaluation of the reliance on the sponsor covenant.
3/
2. Adopting a greater consistency of approach between the 2014 and 2017 valuations, which affects the scale and timing of deficit recovery contributions.
3. Ensuring fairness and equality between generations of scheme members by smoothing future service contributions.
4/
3. Ensuring fairness and equality between generations of scheme members by smoothing future service contributions.
4/
4. Ensuring the valuation uses the most recently available information which means taking account of recent market improvements, new investment considerations and the latest data on mortality, for example.
5/
5/
The Panel estimated these adjustments could mean total required contributions of 29.2% to fund current benefits.
This compares with:
- 26% - current rate
- 36.6% from April 2020 which is proposed by USS, based on the valuation as it stands
6/
This compares with:
- 26% - current rate
- 36.6% from April 2020 which is proposed by USS, based on the valuation as it stands
6/
Joanne Segars, chief of JEP:
"We believe that our constructive and practical proposals for adjustments to the valuation can be implemented quickly and act as the cornerstone for a negotiated settlement."
"We believe that our constructive and practical proposals for adjustments to the valuation can be implemented quickly and act as the cornerstone for a negotiated settlement."
#UCU response to JEP report:
"We welcome the JEP’s proposal that the valuation should be adjusted and are also encouraged that the panel now wishes to look in detail at alternative methods for future valuations."
"We welcome the JEP’s proposal that the valuation should be adjusted and are also encouraged that the panel now wishes to look in detail at alternative methods for future valuations."
Sally Hunt, general secretary of UCU:
"This first report is a significant landmark in our ongoing campaign to defend members’ pensions."
"This first report is a significant landmark in our ongoing campaign to defend members’ pensions."
Alistair Jarvis, chief Exec of #UUK
“We are pleased to receive the Joint Expert Panel’s independent examination of the USS valuation processes and assumptions. We hope that it will create the space for UCU and UUK to find common ground to conclude the 2017 valuation."
“We are pleased to receive the Joint Expert Panel’s independent examination of the USS valuation processes and assumptions. We hope that it will create the space for UCU and UUK to find common ground to conclude the 2017 valuation."
BREAKING: #USS reponse to #JEP report.
"Unless and until an alternative has been agreed, consulted upon, and implemented, cost sharing remains the default process for addressing the regulatory and legal obligations of the 2017 valuation."
uss.co.uk/how-uss-is-run…
"Unless and until an alternative has been agreed, consulted upon, and implemented, cost sharing remains the default process for addressing the regulatory and legal obligations of the 2017 valuation."
uss.co.uk/how-uss-is-run…
