@davidpapineau @Sam_Marsh101 Here, David, are some thoughts: First, the primary fiduciary duty of a DB scheme trustee is to ensure that PAST promises will be paid in full when they come due. They must ensure this, even if the measures they take in the form of de-risking the portfolio into bonds or... 1/
@davidpapineau @Sam_Marsh101 ...higher contributions to recover a deficit on past promises render it unaffordable to continue to make new DB promises going forward in the form of future accrual. 2/
@davidpapineau @Sam_Marsh101 Second, the #USS execs and trustees have an incentive to submit at a valuation that the regulator (tPR) will deem acceptable. They don't want to submit a valuation that tPR will try to take enforcement action against, because deemed insufficiently prudent. 3/
@davidpapineau @Sam_Marsh101 In order to protection against moral hazard of DB scheme underfunding because of the insurance against failure that the pension protection fund provides, tPR has strong incentive to require that schemes are well funded via conservative investment strategy. 4/
@davidpapineau @Sam_Marsh101 A third reason is that, being the former CEO of tPR, I believe that #USS CEO Bill Galvin actually believes in the soundness and legitimacy of the various funding requirements and metrics that tPR imposes on schemes. He probably developed some of them when he ran tPR. 5/
@davidpapineau @Sam_Marsh101 See this thread, which describes how much things changed at #USS when Galvin took over as CEO. Why anyone thought it would be a good idea to appoint someone with the mindset of a pensions regulator to run #USS is a mystery. 6/
threadreaderapp.com/thread/1032302…
threadreaderapp.com/thread/1032302…
@davidpapineau @Sam_Marsh101 Finally, see linked tweet, and the ones below it, to my (& @martin_oneill's linked) discussion of the role of the independent trustees: 7/7
