All entries for Thursday 04 December 2014

Brilliant Report on USS BY First Actuarial

As part of the negotiations about the future of the USS pension scheme, the UCU commissioned First Actuarial to comment on the assumptions being made by the Trustees which have been criticised for being excessively prudent and pessimistic. The paper provides detailed estimates based on a different methodology that assumes the university pension scheme will continue into the indefinite future (since it applies to a whole sector of the economy) rather than being prepared for closure. It also shows that the trustees' approach creates a vicious circle of self-fulfilling pessimistic assumptions.

The report is highly recommended as a carefully argued, forensically detailed demolition of the trustees' case. The paper shows that if the scheme is viewed on an ongoing basis - having a very long or infinite time horizon - and where the chance of the institutions failing to support the scheme is very small - then there is no deficit or at most a very small one that does not necessitate the kind of radical changes being proposed.

The report is quite technical in places requiring a good grasp of the arguments and jargon. But its main message is easy to take away. The report raises a number of questions for the USS officials and the trustees to answer in order to give a fuller picture.

The FA report is here:

ucu_usstrusteeconsultationresponse_nov14.pdf

The UUK consultation document to which it refers is here:

2014_actuarial_valuation_technical_provisions_consultation_paper.pdf:

Dennis Leech : 04 Dec 2014 10:30 |  Tags: Pensions Uss; |  Comments (3) |  Close comments |  Report a problem