Profile picture
Michael Otsuka @MikeOtsuka
, 8 tweets, 3 min read Read on Twitter
JEP RECOMMENDATION #3: Smooth the cost of future service contributions over at least the next 6 years. As this chart indicates, this would reduce contributions by 1.5%. 1/
#USS's failure to smooth the cost of future service contributions constitutes a significant hidden layer of prudence. See this blog post: 2/
medium.com/@mikeotsuka/us…
...and this blog post: 3/
medium.com/@mikeotsuka/us…
As these above posts indicate, not only does #USS's failure to account for their forecast decrease in the cost of future serve build an extra layer of prudence into what they're charging employers and members to accrue DB benefits in the future.... 4/
...but it also adds an extra layer of prudence into Test 1, thereby forcing more de-risking of the assets by year 20 than would otherwise be necessary. The above layers of extra prudence are IN ADDITION to all theses that JEP lists here👇. 5/
👆.@Sam_Marsh101 have you received confirmation from #USS that it's the decline in cost of future service which explains why 67% chance asset growth in 2037 at 26% contribution for next 20 years under Nov de-risking just about satisfies Test 1? 1/
If you haven't, pressing #USS to provide an explanation would be good, so that we do not have yet another employer consultation in which they're kept in the dark about the fact and implications of declining cost of future service. 2/
If falling cost of future service provides a hidden extra layer of Test 1 prudence, that would provide a powerful reason for employers to insist on smoothing over the next 6 years. 3/3
Missing some Tweet in this thread?
You can try to force a refresh.

Like this thread? Get email updates or save it to PDF!

Subscribe to Michael Otsuka
Profile picture

Get real-time email alerts when new unrolls are available from this author!

This content may be removed anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member and get exclusive features!

Premium member ($30.00/year)

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!