As part of the 2020 valuation, we’ll start a formal consultation with Universities UK (UUK) next week.
It’s called the Technical Provisions consultation, and it will set out some proposals based on our work on the valuation methodology so far, including:
Assets – the value of the investments held by the scheme on the valuation date, 31 March 2020.
Liabilities – the amount we need in order to pay the benefits already built up by members up to the valuation date.
Demographic and financial assumptions – like the length of time members contribute to the scheme and how long retirement typically lasts, and expected rates of inflation and future investment returns.
The cost of building up future benefits – the combined contributions that members and employers need to pay in order to cover the cost of building up further benefits from 31 March 2020.
UUK will discuss all these points and more with employers. Then, they’ll comment on where we are so far, and their response will help us understand more about what financial support employers are able and willing to commit to USS in the future.
All the feedback we get from UUK will help us move towards finalised figures in the autumn. Then, we’ll share the figures with the scheme’s stakeholders via the Joint Negotiating Committee (JNC), who’ll decide what action to take.
As trustee of the scheme, it's our job to make sure the pension promises made to our members by their employers are kept. We do not decide what benefits are promised, or how the contributions required to fund them are split. These decisions are made by the JNC.
The JNC is made up of member representatives from the University and College Union (UCU) and employer representatives from Universities UK (UUK), and it has an independent chair.
Whatever the JNC decides, we’ll be ready to support and implement their decisions, and will keep you informed with regular valuation updates on our website.
Frequently asked questions
A valuation establishes whether, on a certain date, the scheme has enough money to pay the pensions promised to members. That date is the ‘valuation date’. For our 2020 valuation, the valuation date is 31 March 2020.
Like all similar schemes, we legally have to carry out a full valuation at least every three years. We can do them more often if we feel that’s necessary.
The law says that, if the valuation shows that a scheme does not have enough money to cover its liabilities, it must put a plan in place to improve its funding. And the law says that we need to take a prudent approach to assessing how much money we will need.
By law, a valuation must take no more than 15 months from the valuation date. So our 2020 valuation must be complete by 30 June 2021. There are a number of milestones we need to reach along the way. These include consulting with UUK and giving the JNC time to decide what they want to do in response to the valuation figures.
As the trustee of USS, our job is to manage and administer the scheme. We collect and invest the contributions from members and employers, and we make sure members get the benefits they are due at the right time. We don’t set the level of benefits in the scheme, but we do tell the employers how much the benefits will cost. Valuations are part of that role: identifying whether the scheme has enough money to pay the benefits already built up, and what the cost of benefits built up in future is likely to be.
Universities UK is the body that represents the sponsoring employers in the scheme. These are the employers that provide the scheme to their employees. UUK’s role in the scheme, and in the valuation, is set out in the Scheme Rules and legislation. By law, we must formally consult with UUK during the valuation process, and properly consider their feedback. We also continually engage with UUK during the process. UUK also appoints representatives to the Joint Negotiating Committee (JNC). The JNC has the job of deciding how any change in future contributions should be shared between employers and members and whether there will be any changes to future benefits.
University and College Union (UCU) is an important stakeholder in our valuations, though the law and USS rules don’t give it the same formal role as UUK. We engage with UCU throughout the valuation process. UCU representatives also sit on the JNC, so help to decide how any change in future contributions should be shared between employers and members.
The Pensions Regulator (TPR) is the government regulator that oversees schemes like ours, including making sure that valuations are carried out correctly and that schemes are funded appropriately. We must submit our finished valuation to TPR by the deadline. During the process, we keep in touch with TPR to let them know what is happening, and discuss the key issues with them.
Universities UK (UUK) represents the employers that fund USS. It also appoints members to the Joint Negotiating Committee (JNC).
University and College Union (UCU) represents over 120,000 academics, lecturers, trainers, instructors, researchers, managers, administrators, computer staff, librarians and postgraduates in universities, colleges, prisons, adult education and training organisations across the UK. It also appoints members of the JNC to represent USS members.
The Pensions Regulator (TPR) protects the UK’s workplace pensions, by making sure employers, trustees, pension specialists and business advisers can fulfil their duties to scheme members.
The Joint Negotiating Committee (JNC) is part of the governance of USS. A key part of its role is to decide how contributions are shared between members and employers and whether there will be any changes to future benefits.