On 7 September 2020 the USS Trustee launched its first formal consultation on the 2020 valuation (technical provisions).
In response, a spokesperson for Universities UK, which represents 341 USS employers, said:
“These deficit figures from USS show the significant financial challenges facing the scheme at this time. The USS Trustee’s consultation material covers a huge range of illustrative outcomes, with a number of factors yet to be determined. Employers will require further information on some issues before they can fully respond, including the results of the Trustee’s covenant assessment and discussions on an appropriate recovery plan. Nonetheless, we will be engaging with employers over the coming weeks on this first formal consultation in relation to the USS 2020 valuation (Technical Provisions), to hear their views on the proposed approach and assumptions.
“Over recent months, we have worked closely with the University and College Union (UCU), which represents staff who are members of the scheme, and with USS to bring about important changes to the scheme. This has led to a new valuation methodology in line with the Joint Expert Panel’s recommendation, and the removal of the Test 1 measure of employers’ risk appetite, which the union has campaigned for. Additionally, a scheme purpose and shared valuation principles have been agreed alongside a commitment from all involved to greater levels of transparency.
“We want to continue a positive dialogue with UCU and USS throughout this valuation, and to work with members and employers to secure an attractive and sustainable scheme through these economically challenging times. We should collectively explore potential ways of making it more appealing and inclusive, including the possibility of allowing members to opt to reduce their contributions in return for different benefits, rather than leave the scheme. Employers are acutely aware that the current employee contribution levels are leading to high levels of opt-out by younger and less well-paid staff, leaving them without any employer contributions to their pension provision. Now, more than ever, members need choice over contribution levels.”