Commenting on publication of the latest monthly monitoring of the USS scheme for March 2022, a spokesperson for USS employers said:
“It’s encouraging that the latest monthly monitoring shows that the benefit reforms, together with the substantial covenant measures pledged by employers at the last valuation and the recent market movements, have created a healthier financial outlook for the Universities Superannuation Scheme (USS). Without the reforms, the latest data from USS shows that total contributions would have to be much higher than the current level of 31.4% – in excess of 36% for future benefits, with deficit recovery costs in addition.
“The continued improvement in the scheme’s financial position, however, only relates to a short period and the situation remains volatile. Consistently better scheme performance over the next ten months leading up to the scheduled valuation in March 2023 could make a real difference and allow for improved benefits, lower contributions, or a combination of both.
“Nevertheless, USS is now doing a more detailed assessment as to whether the improved monthly monitoring could translate into a materially better outcome. This would not be a full valuation, but it would involve deeper analysis of the funding position on 31 March 2022. This information should be available in early July. There’s also the possibility of starting work earlier on the scheduled March 2023 valuation so that any improvements might be implemented more quickly.
“We are seeking clarification from the USS Trustee about the short and medium-term options that might be available should the positive financial position continue, but without having to undertake an earlier full valuation. We know a new valuation would take many months and divert focus away from fundamental reforms such as developing lower-cost options for members, considering alternative scheme designs, and conducting a thorough governance review of USS.
“We will keep in close dialogue with USS over the coming months as the monitoring data is released and as, we hope, the improvements in the scheme’s financial position are sustained. We look forward to discussing the feasible options with employers, representatives of the University and College Union, and the USS Trustee.”