.@TPRgovuk published its annual funding statement for DB pension scheme valuations today. There are some interesting nuggets relevant to #ussstrikes [thread] thepensionsregulator.gov.uk/press/trustees…
The Director of Regulatory Policy said "Trustees should negotiate robustly with the sponsoring employer to secure a fair deal for the pension scheme, while employers should balance the interests of pension savers with returns to shareholders and investors....
... We are working more closely than ever with trustees to support them in this process". So, USS should be negotiating with @UniversitiesUK to provide the best deal for scheme members. USS should be looking after our interests. Are they?
"the funding level is likely to be marginally better compared to three years ago" BUT, "there could be a wide variance between the circumstances of individual schemes, depending on their approaches to risk-management"
Our fund should be healthier than it was in 2014 because the underlying market is healthier. If it's not, it might be because of the USS approach to risk-management. Are the USS trustees so cautious as to have damaged the fund?
"TPR has a range of powers and interventions which may be available where it is concerned that a pension scheme is not being treated fairly, or is poorly governed" Is the most significant industrial action in the HE sector ever, an indicator of unfair treatment that concerns tPR?
And now some quotes from the funding statement itself thepensionsregulator.gov.uk/docs/db-annual…
"Pensions are deferred pay and pension deficits are responsibilities of
the employer, to be repaid with a regular, reasonable and affordable
flow of contributions" [p11]. It doesn't get clearer than that, folks.
the employer, to be repaid with a regular, reasonable and affordable
flow of contributions" [p11]. It doesn't get clearer than that, folks.
"trustees should also be alert to other [than dividend payments to shareholders] forms of covenant leakage
when considering what contributions are affordable and whether the
scheme is being treated fairly". [p12]
when considering what contributions are affordable and whether the
scheme is being treated fairly". [p12]
Commitments to capital development projects - shiny new lecture theatres - does not remove value from the Universities, and so does not weaken their covenant - their ability to pay the necessary contributions to our pension scheme. It just reduces cash flow. Not a good excuse.
"Trustees who are concerned that their scheme is disadvantaged should
not agree to valuations which are not reasonable and notify us if they
cannot agree their valuation by their statutory deadline and discuss their
concerns with us." [p12]
not agree to valuations which are not reasonable and notify us if they
cannot agree their valuation by their statutory deadline and discuss their
concerns with us." [p12]
That 30 June deadline that's "set in stone"? Nope. "Talk to us" say tPR. "Discuss your concerns". My view: the biggest industrial action in the HE sector ever is a very good reason for USS to be concerned about the 2017 valuation, and why it cannot be approved.
"We are now clearer about what we expect from trustees, are quicker to
act and are tougher on those who fail to act in the interests of members." [p13] Are we sure that the USS trustees are acting in the interests of members? See #USSbriefs1 and #USSbriefs5 for more info
act and are tougher on those who fail to act in the interests of members." [p13] Are we sure that the USS trustees are acting in the interests of members? See #USSbriefs1 and #USSbriefs5 for more info
Written by the brilliant @felicitycallard and @gailfdavies
TL;DR tPR are flexible and demonstrate reasonableness, and are robust in their view that the members' interests are the most important consideration for everyone involved. Definitely not the ogre that will force us to accept the flawed November valuation and commit us to DC.
