Okay, time for that #USS update! This thread is going to take in as much of what's going on as possible. And that is *a lot*. I will try to be as concise as I can, but this could be a long one. Happy Easter break. 1/
Firstly, the #USS board has confirmed it is proceeding with the 2020 valuation using market data as at 31 March. It is hard to see how a meaningful assessment of the scheme's long-term health can be made as that date, but that's what we're going to have to try and do. 2/
There are some arguments in favour of proceeding: @TPRgovuk will issue guidance for schemes with a March 2020 valuation date which may allow more flexibility than normal, and "post-valuation experience" over the next 15 months can (and we're told will) be taken into account. 3/
In any case, #USS are ploughing ahead at a time when most other processes are pausing and the sector's attention is elsewhere. It will be the job of both @UCU and @UniversitiesUK's representatives to hold USS to account and ensure that there's no exploitation of the situation. 5/
There are important discussions currently underway at the Valuation Methodology Discussion Forum, a working group formed of @UCU and @UniversitiesUK representatives, their actuarial advisers, #USS trustees/executive/scheme actuary. @TPRgovuk are invited but have not attended. 6/
Early meetings were frustrating, with a tendancy by #USS to tell the group how it would be conducting the valuation rather than engage in meaningful discussion, but the most recent meetings have seen more engagement with the ideas put forward by @UCU and @UniversitiesUK. 7/
In a major change from all other recent valuations, @UCU and @UniversitiesUK are working together very closely and well on valuation approaches. This is hugely important and long overdue. I believe it to be explained in part by the resolve shown by members in both disputes. 8/
A 'discussion document' on the 2020 methodology was released to @USSemployers in early March, and #USS want responses by mid-April. Many employers are finding it hard to answer to the questions asked, as both @UCU and @UniversitiesUK warned they would. 9/
The discussion document was released prematurely, with deliberations at the Valuation Methodology Discussion Forum not well advanced. It is short on the analysis and information needed for decisions. Worse still, some of the information in it is quite seriously misleading. 10/
We are still awaiting a clarificatory note from #USS as to the misleading presentation of information in the document, though @UniversitiesUK's actuaries, Aon, did pick up on some of it in their paper to @USSemployers found at the link below. 11/ ussemployers.org.uk/briefings/uss-…
While we await #USS's clarification, allow me to explain as briefly and non-technically as I can how the information in the discussion document is misleading. It all comes down to comparisons between an investment approach free of de-risking, and USS's proposed approach. 12/
Both @UCU and @UniversitiesUK have been keen to explore a "no de-risking" approach which, if tolerable and manageable, will mean the scheme should remain affordable over the long-term. We asked for side-by-side comparisons with other approaches. This is where problems began. 13/
Section 7 of the discussion document compares a "no de-risking" approach with #USS's favoured approach. From what's written here, it appears that there's not much to pick between them: the former maintains 65% growth assets, the latter 55% reducing to 50% over 20 years. 14/ 
This lack of much to pick between the approaches had confused members of the VMDF, and was probed by both UCU and UUK representatives, as the effects on the valuation outcome were sharp, as can be seen comparing the bottom row of Table 7.1 with the middle row of 7.2. 15/
We'll resolve this paradox in a minute. Another point of confusion was in Appendix A, added last minute by #USS to partially address another point raised by UCU & UUK at the VMDF (namely that Section 7 didn't provide proper like-for-like comparisons of the Year 20 position). 16/
Appendix A contained a new source of confusion, however. Given the big difference between the "no de-risking" approach and the proposed #USS approach evident in Section 7, why was there not more difference in the Year 20 projections in Table A.1? 17/
Below was the moment we got an answer from USS, and apologies for the cryptic nature of my post. It turned out that the basis for the "no de-risking" approach (more specifically, the discount rate) had shifted between Section 7 and Appendix A. 18/
This discrepancy had the following effect: comparing 65% growth assets for the no de-risking case with 55% reducing to 50% for #USS's proposed approach was misleading: the correct comparison is, I think, 65% vs 44% reducing to 40% over 20 years. 19/
This resolves the paradox in Section 7, namely the big difference in the effect on the valuation is due to a much bigger difference in investment strategy than claimed in the document. 20/
In Appendix A, the lack of a difference between the two approaches is due to a much lower discount rate being used for the "no de-risking" case than earlier in the document (1.89% as opposed to 2.23%). I don't believe anyone reading the document could have realised this. 21/
#USS have been reluctant to admit any problems with the document, and have objected to the use of the term 'misleading' for the above. Despite this problem becoming clear almost a month ago, and the consultation window now almost closed, they have not issued a clarification. 22/
This is not good at a time when there has been a clear need identified (and agreed by all parties) to rebuild trust. I only hope that the incoming #USS chair, Kate Barker, sees the need for a major shift in culture within our pension scheme. 23/
This thread is now far too long, and I haven't even mentioned: a) the state of negotiations over the dispute; b) the recruitment of UCU trustees; c) the appointment of a new JNC chair; d) Jane Hutton's employment tribunal. I'm afraid they will have to wait for another day! 24/24
