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/
The Panel reckoned that by giving the strength and diversity of the sector a greater weight, the Trustee and employers may be able to agree a larger “risk envelope” or appetite. (Essentially the Panel disputes the sector is as risky as judged). 3/
The Panel said the way employers’ risk appetite had been applied (by the Trustees) through “Test 1” had contributed to the adoption of “strong risk aversion”. This comment is really about the judgement of the Trustees. 4/
On the unilateral right of the Trustee to set contributions ( subject to consultation)the Panel said “clearly the process needs to be managed more effectively.” 5/
On the Regulator, the Panel said tPR appeared to have taken an approach to the valuation that “does not fully take account of the specifities of USS”. These included the very long-term nature of the scheme; it is cash-flow + & “last-man standing 6/
The Panel said the “framing and context” of questions asked of university employers, as part of the the consultation on the 2017 #USS valuation, produced “misleading results”. The outcome appeared to be “inconsistent with many employers’ wishes” said the Panel. 7/
Fairly damning criticism on the UUK’s consultation process with the 350 university employers it represents. The Panel said the consultation timeframes were sometimes “very short”. It was “debatable” whether employers were able to give “fully informed” answers to imp questions. 8/
USS also came in for criticism from the Panel over the “large volume” of information it had put on its website on the 2017 valuation which was “extremely technical and complex” in language and content. This had likely contributed to falling member confidence in the scheme. 9/
The Panel said there was no formal mechanism for involving #USS members in the valuation process. This was relevant given cost-sharing when additional contributions were required. Responses to the JEP report from USS / TPR / UUK to follow, for completeness of thread. 10/
USS response: “There may well be areas where our opinion and understanding differs from that if the Panel but we will want to reflect on the report in due course.” Full response: uss.co.uk/how-uss-is-run…. 11/
UUK response: “We hope that it (the JEP report) will create the space for UCU and UUK to find common ground to conclude the 2017 valuation.” universitiesuk.ac.uk/news/Pages/Res…. /12
Pensions Regulator: “We note the publication of the report & await responses from the universities, union & scheme trustee. More analysis now needs to be done to fully understand the implications of the proposals on the l-t affordability of the scheme.” /13
UCU response: “This first report is a significant landmark in our ongoing campaign to defend members’ pensions.” ucu.org.uk/article/9632/U…
Link to #USS Joint Expert Panel report: ucu.org.uk/media/9523/JEP… End of thread.
Can you please unroll? @threadreaderapp Muchas Gracias!
