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Help shape UCL's response to the 2020 USS pensions valuation.
Updated 13 October 2020
In September 2020, Provost sent a message drawing your attention to the Universities Superannuation Scheme (USS) 2020 pensions valuation and their request for feedback from employers.
UCL’s initial view is that, while the funding challenges to USS are apparent, the content in the consultation document falls short of offering a credible way forward. This is not least because the wide range of additional contributions outlined to support the scheme (see page 31) is unlikely to be affordable to universities and, more importantly, our staff. While we are pleased that some of the recommendations of the Joint Expert Panel have been incorporated, it is our view that USS could have gone further.
Universities UK (UUK) represents the 137 higher education employers in discussions on the future of USS. We are awaiting an orientation document from UUK, which should help employers and employees frame their responses to what is a complex consultation document. Once that is received, UCL will launch a consultation with our staff as it is vital that your views influence our overall response.
UUK independent actuarial advisers are currently assessing the consultation document in detail and that will help inform our view further. However, we note and agree with the initial points that have been made by UUK in response to the valuation consultation:
The covenant work remains outstanding and the recovery plan consultation has now been moved to a later stage in the valuation process. The covenant relates to the legal obligation and financial ability of employers to financially support the pension scheme now and in the future. When the scheme takes risk it is relying on a strong covenant for support if, for example, investment returns are lower than expected. Both the covenant work and the recovery plan are vital parts that will have a very material impact on the overall valuation outcome; The extreme range of illustrative prices lack credibility – in certain instances illustrating deficit recovery contributions (DRCs) as high as the current combined contribution rates; and There is little acknowledgement of affordability – both in relation to employers’ and members’ contributions.
These are our initial observations, but it is very important that we garner opinion from our staff. Our consultation questionnaire is now closed as we need time to understand the feedback we've received before submitting our formal response to USS directly and via UUK.
USS Town Hall meeting held on 1 October 2020
UCL held a meeting, chaired by the Provost, with staff to discuss the valuation and answer employees' questions, a recording of that meeting is available below.
