Discussion began on 2 January about a new valuation of the Universities Superannuation Scheme (USS), a pension scheme for university staff.
USS are indicating that they are not seeking to implement the recommendations of the Joint Expert Panel (JEP), which was set up by Universities’ UK (UUK) and the University and College Union (UCU) and published its first report in September, in full. The report in September suggested increasing the contribution rate from 8% to 9.1% for employees and from 18% to 20.1% for employers.
The methodology of the new valuation does not appear to have changed from that of the 2017 valuation, which was at the centre of last year’s UCU strike. This is despite the fact that the JEP report criticised the methodology of the 2017 valuation.
The methodology of the new valuation does not appear to have changed from that of the 2017 valuation, which was at the centre of last year’s UCU strike
The USS have said on their website that they will consider the JEP’s recommendations in isolation but not in full. They have stated that the JEP’s report did not give enough consideration to market data and the extra financial risks that would be incurred if it was implemented, which UUK have since asked the USS to assess and address.
The trustee is also consulting with UUK on ways in which contributions may automatically increase if investment returns in the short term prove lower than expected.
A spokesperson for Exeter UCU told Exeposé: ‘‘JEP was set up to provide an easy resolution. It said its proposals were a short-term compromise designed to be accepted by USS and other parties as quickly as possible. The rest of the JEP report contained a much wider-ranging critique of the Scheme’s valuation methods and assumptions. USS not only ignored this critique, and they are now admitting that even the short-term compromise would be unacceptable.’’
A University of Exeter spokesperson said: ‘‘The valuation process is at an early stage, but it is encouraging to see this information. We are currently considering the consultation document’.’
This article originally appeared in print 14/01/2019.