Thread by @aechitty1

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake Employers are in a position to push USS very hard. For example, they can say that while they accept TPR's Code of Practice 3 for DB schemes para 117: 1/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake "Technical provisions should represent a target reserve to hold against a scheme's future liabilities calculated using assumptions that have been chosen prudently, taking into account the degree to which the employer covenant can support a range of likely adverse outcomes." 2/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake They can say that therefore they accept that USS is justified in targeting a certain 'reliance on covenant' (self-sufficiency value of liabilities minus assets) in 5 or 10 or 20 years time, 3/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake Nevertheless they can categorically reject USS's further strategy (embodied in Test 1) of progressively reducing the *volatility* of reliance over the next 20 years by progressively aligning the portfolio with a self-sufficiency portfolio. 4/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake This strategy more than anything has driven the DB scheme into crisis. Instead they can demand that their/our money remain in its present portfolio, pointing to the evidence provided by Sam Marsh and others that they will thereby reach their chosen year 20 reliance target. 5/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake To my knowledge nothing in the Pensions Act 2004, the Scheme Funding Regulations 2005, or Code of Practice 3 mandates this further 'de-risking' strategy, and especially not for a scheme backed by a whole semi-public sector rather than a single private company. 6/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake Therefore TPR is not legally or morally entitled to insist on it. UUK could commission their actuaries and pension law experts to demonstrate as much. 7/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake Sure UUK will have to swallow their pride to do this, since only 15 months ago they were (for whatever reason) demanding full-on de-risking when USS, spooked by the huge rise in long-dated gilt prices, were rowing back and suggesting a postponed form instead. 8/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake But surely the pension rights and security of their employees have a certain priority over this consideration? 9/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake PS For a graph of the long-dated index-linked gilt price rise 2014-17, see bit.ly/2FeBs3i. Choose 'plot: price' and 'chart duration: 7 year'. 10/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake PPS Of course TPR's para 117 itself is predicated on the 'valuation of accrued benefits' method of assessing pension scheme funding, and Carne, Leech, Wilkinson, Curtiss and others are right that in the longer term that method has to go. 11/

@JohnRalfe1 @felicitycallard @DrJoGrady @ProfTomMole @MikeOtsuka @carlomorelliUCU @USSEmployers @ucu @AlistairJarvis @JoanneSegars @SallyBridgeland @Sam_Marsh101 @Flibitygibity @HershMarion @Dennis_Leech @DaveGuppy @UofGVC @adamtickell @RedActuary @Derek_Benstead @kevinwesbroom @GuyCoughlan @USSbriefs @JosephineCumbo @Wonkhe @stianwestlake But for now that method is mandated by the regulatory framework. To change it (or even get a USS opt-out from it) will take a further shift in the discursive ground. What matters for now is the 2018 valuation. Sufficient unto the day is struggle thereof. 12/12